Mortgages are available in many styles – like homes. The choice of type depends on your personal situation and your situation. To choose the best loan, you need to know exactly what your situation is. Will you be staying in this house for years or do you plan to buy bigger and better in 5 years. Do you think the move is a possibility? There are many types of loans available which come with different advantages and disadvantages.

A fixed rate mortgage: this allows you to lock in an interest rate for 15, 20 or 30 years. Fixed means that your mortgage will not change during the life of the loan (but your taxes and insurance can and will affect your monthly payment). It offers lower consistent payout and is the most popular.

A Variable Rate Mortgage (ARM): offers a lower interest rate than a fixed rate mortgage for an initial period, but the rate may fluctuate after the introductory period, depending on changes in interest rate conditions. There are caps that protect the rising interest rate, but these vary from lender to lender. They usually don’t change for the first 3 to 5 years. If you don’t stay longer than that, this might be the loan for you.

Now we need to discuss the conventional loan or the government loan.

Conventional loans generally require a credit score of 620 or higher and a down payment of 5%. You should also be aware that if you cut less than 20%, you will have to pay for private mortgage insurance, an additional monthly fee designed to cover the risk to the lender that a borrower could default on a loan. The lender must cancel the PMI when you reach 22% of equity in your home, and you can apply to cancel it once you reach 20% of equity. Fannie Mae and Freddie Mac set limits on how much you can borrow for a conventional loan. A home loan that meets these limits is called a compliant loan: in most cities, the maximum amount for a compliant loan is $ 453,100. The limits are reviewed annually and are subject to change based on the average price of homes in each region. A home loan that exceeds these limits is called a jumbo loan. Jumbo loans generally require a higher down payment and a credit score of at least 720.

Government loans, on the other hand, include loans guaranteed by the Federal Housing Administration, the United States Department of Veterans Affairs, and the United States Department of Agriculture for rural development.

FHA loans are used by a wide range of people, including those with lower credit scores and lower incomes. You can get an FHA loan with a 3.5 percent down payment if you have a minimum credit score of 600. You can still qualify with a credit score below 600, but the down payment and other requirements will be a lot. higher. FHA loans comply with loan limits set by the county. These limits typically range from $ 294,515 to $ 679,650 in high cost areas. You can view the FHA mortgage limits for your county at hud.gov.

If you are a veteran or the spouse of a veteran, you may be eligible for a VA loan. A mortgage with a zero percent down payment. A VA loan is often the best mortgage option for those who qualify.

You can claim a zero percent down payment. USDA Loans These are mortgages for home buyers with limited income in cities of 10,000 people or less, or that are “rural in character”. . USDA loans generally have lower interest rates than non-USDA loans. Only a number of lenders offer USDA loans.

Your job may qualify you for a special loan product. This allows teachers, law enforcement officials, first responders and government employees – up to 50 percent – to access eligible homes in revitalization districts.

Whatever you decide to do, take the time to discuss these different options with your lender. You will be glad you did. Once you’ve got your finances in order, also find out about an approximate price and tax status so you know what your monthly payment will be. These steps will take much of the fear out of the home buying process.

Mark Brady is the president of the Portage County Real Estate Association.