Loan Types 101
Which loan is best for you?
Here is a simple guide to help you understand the general types of mortgage loans available.
If you have any questions, contact your Spark Mortgage loan originator.
Conventional Mortgage
This is your standard bread-and-butter mortgage. It’s the most popular type of mortgage out there, and for good reason. It’s simpler than many other loans, your interest rate stays the same, and you have an option between 30-year and 15-year terms.
FHA Mortgage
If your credit score is lower, an FHA mortgage might just be the answer. Insured by the Federal Housing Administration, these loans are available to people with lower FICO scores and down payments as low as 3.5 percent.
FHA loans are especially popular among first-time buyers. In recent years, nearly half of first-time home buyers used an FHA loan.
USDA Mortgage
The USDA’s Rural Development program helps low-to-moderate income home buyers in certain areas secure an affordable mortgage. Eligible home buyers can secure a mortgage with as little as $0 down.
While borrowers must have mortgage insurance, USDA loans feature relatively low interest rates, and the program is popular among first-time home buyers.
VA Mortgage
Backed by the Department of Veterans Affairs, these mortgages relax the restrictions of conventional mortgages for members of the armed forces, both current and former.
Eligible applicants can secure low-interest loans, often without a down payment. Closing costs are generally lower for VA loans, and at Spark Mortgage, we cover the appraisal fee for all VA loans.