There are a variety of mortgage loan types available. The most common ones are Conventional, Government-backed (FHA and VA), and Jumbo. Each has different down payment requirements, interest rates, and monthly payments.
The two main types of interest rates are:
- Fixed: Most homebuyers take out fixed-rate mortgages for 30, 20, or 15-year terms. Often called “conventional,” these mortgages have fixed interest rates and regular monthly principal-and-interest payments that don’t vary over the life of the loan.
- Adjustable: There are several kinds of adjustable-rate mortgages (ARMs) available. With ARMs, the interest rate applied on the outstanding balance varies throughout the life of the loan.