Mortgages are loans for financing or refinancing a home. You can shop for fixed-rate or adjustable-rate mortgages with various term lengths, depending on your credit score and other factors.

With terms starting at 15 years, fixed-rate mortgages offer interest and principal payments that remain the same for the entire life of the loan. Adjustable-rate mortgages typically start at a lower rate that lasts for a set period and then changes periodically thereafter.

Conventional Mortgages


Conventional or conforming mortgage loans are private loans that aren’t secured by a government agency and meet guidelines established by Fannie Mae and Freddie Mac. To get approval for a conventional mortgage loan, you must meet FICO score, debt-to-income ratio and loan amount requirements. A down payment of 20 percent is also typically required to avoid private mortgage insurance. See the latest Mortgage Loan Rates here.

Conventional 97

A conventional 97 mortgage has no upfront mortgage fees and offers the ability to cancel private mortgage insurance when the loan-to-value ratio reaches 80 percent. To qualify, you’ll need a 3 percent down payment and you’ll have to meet credit score, debt-to-income and loan amount requirements. In addition, at least one buyer must not have been a homeowner in the last three years.

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Non-Conventional or Jumbo Home Loans

Known as a non-conforming loan, a jumbo loan is a mortgage that exceeds $424,100. Jumbo loans often carry higher interest rates than conventional loans.

To get a lower rate, you can opt for a jumbo ARM. To qualify, you must meet credit history, debt-to-income and loan amount requirements — plus have a substantial down payment.

Government-Backed Mortgages

FHA Loan

Federal Housing Administration loans feature lower down payments and closing costs as well as more flexible credit criteria than private lenders offer, which makes them attractive options for people with less-than-stellar credit. You can potentially qualify with a credit score as low as 580.                   

At least 12 months of on-time payment history and a minimum down payment of 3.5 percent are also required. In addition, most FHA loans require borrowers to pay an upfront mortgage insurance premium and a monthly mortgage insurance premium for the life of the loan.  

U.S. Department of Veterans Affairs Loan

A VA-guaranteed loan is available to all qualified veterans, some service members, reservists, National Guard members and certain surviving spouses of veterans who are deceased. Typically, no down payment and no mortgage insurance is required, although a one-time VA funding fee might apply. Instead of relying on a minimum credit score, lenders are required to review the applicant’s entire loan profile.

U.S. Department of Agriculture Loan

Low- and moderate-income families who live in rural areas can apply for a USDA-guaranteed home loan as long as they meet income and credit history requirements. The property must be in an eligible area to qualify.

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Other Mortgages

Cash-Out Refinance

A cash-out refinance is a mortgage loan that satisfies your current mortgage balance and allows you to use the equity in your home for personal use. This type of loan might make sense for you if you can get a better interest rate than that of your current mortgage, you plan to shorten the term of your loan instead of refinancing for 30 years, and you plan to keep your mortgage for at least several more years.

Home Equity Loans

When you prefer to keep your current mortgage, a home equity loan is an option. Funds are received as a one-time, lump-sum payment. Functioning as a second mortgage, these loans typically have a fixed rate and require that you repay interest and principal each month.

Home Affordable Refinance Program

If you have limited or no equity or owe as much or more on your current mortgage than your home is worth, then you might find the government’s HARP program helpful. To qualify, your loan must be owned by Freddie Mac or Fannie Mae and have an origination date prior to May 31, 2009. Additionally, your mortgage payment history and loan-to-value ratio will be considered by lenders.

USDA Streamlined Assist Refinance Loans

USDA direct and guaranteed home loan borrowers with limited or non-existent equity in their home can use this mortgage refinancing program to get better loan rates and terms. To qualify for USDA Streamline, you’ll need a 12-month on-time mortgage payment history and meet income eligibility requirements.

FHA Streamline

Even if you owe more than your home is worth, as long as you are a current FHA loan holder, you can apply to refinance your mortgage for a lower rate and payment with the FHA Streamline program. The program has flexible credit and minimal documentation requirements and no required appraisal. Fixed-rate loans are offered in 15- to 30-year terms, and 5-year ARMs are also available.

About the Author

Cynthia Measom is a Texas-based writer specializing in finance, business, parenting and education. With almost a decade of online writing experience, her work has appeared on websites such as, The Bump and The Motley Fool. Measom received a Bachelor of Arts in English from the University of Texas at Austin.