Choosing a Mortgage

Determining financing is a crucial part of the home buying process. There are a number of aspects of loans to be considered.

Will your loan be fixed or adjustable?

What will the loan term be? 15 years, 20 years or 30 years

What type of loan will you have? Conventional, FHA, VA or No-doc

Conventional Loans: This loan is not directly insured by the Federal Government. Fannie Mae or Freddie Mac are private corporations that are regulated by the government. These entities handle most conventional loans under $275,000. Conventional loans over $275,000 are considered called "jumbo loans" and are financed by the private investment market.

FHA Loans: These loans are insured by (but not funded by) the Federal Housing Administration division of the U.S. Department of Housing and Urban Development (HUD). This loan type is generally for low to middle-income buyers and first-time buyers.

VA Loans: This loan is for those qualified by military service. The Veterans Administration insures (but does not fund) 15 and 30 year fixed as well as 1 year adjustable mortgages. This loan offers lower down payment requirements and can even allow no money down.

No-Document ("No-doc) Loans: No-doc mortgages are generally a wise choice for self-employed people, those who do not wish to verify their income, and those with a brief or blemished credit history, or no credit. While the process for obtaining such a loan may have a shorter application process and simplified approval process the interest rates can be higher and this loan type ifs offered by fewer lenders.

Will you pay for points or not utilize points?