Securing a mortgage is one of the most important steps on the path to purchasing a home, and it can also be one of the most intimidating, especially if you haven't navigated the process previously. Fortunately, a wide range of mortgage options are available to suit buyers' various budgetary and lifestyle needs. These include conventional mortgages, fixed-rate mortgages, adjustable-rate mortgages, and a variety of government-backed loans. Our real estate agents have more details on the most common mortgage options for homebuyers.

• Conventional Mortgage
  A conventional mortgage is the most common type and offers several advantages if you qualify. Conventional mortgages tend to have a lower cost than many other types of mortgages and lower down payment requirements (as low as 3 percent for first-time buyers). To qualify for a conventional mortgage, you typically need a minimum credit score of at least 620 and a debt-to-income ratio of 50 percent or lower. If you're making a down payment of less than 20 percent of the home's value, you'll also need to purchase private mortgage insurance.

• Fixed-Rate Mortgage
  With a fixed-rate mortgage, you have the same interest rate and make the same payments for the life of the loan. That makes fixed-rate mortgages a predictable option, especially if you plan to live in the home for a long time. If you can lock in a fixed-rate mortgage when interest rates are low, you might save quite a bit of money over the life of the loan. However, the same thing is true in the other direction if you lock in when interest rates are high. As with any mortgage option, speaking with a trusted financial advisor before locking in your choice is best.

• Adjustable-Rate Mortgage
  The counterpart to a fixed-rate mortgage, an adjustable-rate mortgage has interest rates that move depending on market rates. This type of loan typically begins with a period of fixed interest (usually 5, 7, or 10 years), and after that, your interest rates will change based on market interest rates. This type of loan often offers savings during the period of fixed interest but can become significantly more expensive after that, depending on market interest rates at the time.

• FHA Loans
  Insured by the Federal Housing Administration, FHA loans can be an appealing option for people with lower credit scores. With a credit score of at least 580, FHA loan recipients can pay a down payment of as little as 3.5 percent. With a down payment of 10 percent, FHA loans may be available with a credit score of 500 or above.

• USDA Loans
  If you're purchasing a home in a qualifying rural area, USDA loans offer a number of potential advantages. They allow for the possibility of purchasing a home with no money down, and USDA loans generally have lower mortgage insurance requirements than FHA loans. In addition to buying a home in an eligible area, you'll need to meet income requirements to qualify.

• VA Loans
  Offered by the Department of Veterans Affairs, VA loans are another option that allows you to purchase with no money down, and they also offer lower interest rates than most other types of loans. You'll need to meet service requirements in the National Guard or armed forces to qualify.

Searching for the right team to help you understand your options and purchase your next home? Discuss your mortgage options or get pre-approved today. Our team is here to help you accomplish your real estate goals. Call today for help buying or selling your next home.