Mortgage Basics
Understanding mortgages is key to successful homeownership. Learn the fundamentals of loan types, terms, and the application process.
Get Mortgage QuoteTypes of Mortgages
Different mortgage programs are designed for different buyers. Find the one that best fits your situation.
Conventional Loans
Traditional mortgages not backed by government insurance.
Key Features:
- 20% down payment recommended
- Flexible qualification
- Various term lengths
- Private mortgage insurance available
Best For:
Buyers with good credit and 20% down payment
FHA Loans
Government-backed loans designed to help first-time buyers.
Key Features:
- 3.5% down payment minimum
- More flexible credit requirements
- Lower closing costs
- Gift funds allowed
Best For:
First-time buyers and those with lower credit scores
VA Loans
Available to veterans, active duty, and eligible spouses.
Key Features:
- No down payment required
- No PMI
- Competitive rates
- Seller can pay closing costs
Best For:
Veterans and active military personnel
USDA Loans
Designed for rural and suburban home buyers.
Key Features:
- No down payment
- Low interest rates
- 100% financing available
- Rural area requirement
Best For:
Buyers in eligible rural areas
Mortgage Terms Explained
Understanding loan terms helps you choose the right mortgage for your situation
15-year Fixed
Short-term loan with higher payments but less total interest
Pros:
- Build equity faster
- Lower total interest
- Rate is locked for 15 years
Cons:
- Higher monthly payments
- Less affordable for some buyers
30-year Fixed
Long-term loan with lower payments but more total interest
Pros:
- Lower monthly payments
- More affordable
- Rate is locked for 30 years
Cons:
- More total interest paid
- Slower equity build
5/1 ARM
Fixed rate for 5 years, then adjusts annually
Pros:
- Lower initial rate
- Good for short-term ownership
- Rate can decrease
Cons:
- Rate can increase significantly
- Less predictable payments
Key Mortgage Concepts
Essential terms and concepts every home buyer should understand
Down Payment
Initial payment made when purchasing a home, typically 3-20% of the purchase price.
Interest Rate
Percentage charged by lenders for borrowing money, affects monthly payment amount.
Principal & Interest
Principal pays down the loan balance, interest is the cost of borrowing money.
PMI
Private Mortgage Insurance required when down payment is less than 20%.
Closing Costs
Fees paid at closing including origination fees, appraisal, title insurance.
Pre-Approval
Process where lender reviews your finances and provides loan amount you're eligible for.
Ready to Apply for a Mortgage?
Our mortgage experts can help you understand your options and find the best loan for your situation.