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Writer's picturePenFed Realty Texas

SCRIPT: What Are The Different Types of Mortgages Available For Buyers?

Updated: Oct 26, 2021

Hi everyone! [JOE AGENT] here with Berkshire Hathaway HomeServices PenFed Realty Texas. I wanted to take a moment & expand on something I find a lot of buyers

contemplating when getting ready to find that next home, mortgages. There are a

number of different mortgage options so I wanted to take a second to elaborate on a

couple of the more popular ones.


First, is the Conventional loan. These loans are offered by private lenders & will have

different loan types available such as Fixed Rate & Jumbo Mortgages. A fixed rate loan

or mortgage is one in which your interest rate does not change for a period of time

during the life of the loan. This allows the borrower to predict loan payments in advance

& know how long it will take to pay off the loan amount. A second option offered by

many Lenders is a Jumbo Mortgage. In this case, the borrower is allowed to take on

more debt that normal limits allow, generally for a higher priced property, but requires a

larger down payment as the risk to the lender is greater.


The second popular loan type is the FHA Loan, which, is a loan guaranteed by the US

Federal Housing Administration. This type makes it easier for families & individuals with

lower incomes to be able to purchase homes. The requirement for this type of loan is

that the borrower must pay a premium of 1.75% to the FHA up front, as well as a monthly

premium which makes for these loans being more expensive than a Conventional Loan

option. However, if the borrower can not qualify for a Conventional Loan or other option,

an FHA Loan is a great opportunity to purchase a house.


Although these are the 2 most common loan types in Texas, there are also more such

as; VA loans, USDA loans, First Time Homebuyer mortgages & more. If you want more

detailed information on loan types available & what could be the best option for your

specific needs, give me a call & let’s chat!

 

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