There are many different kinds of home loans, and choosing the right one depends on your finances and tolerance for risk. Here is a quick guide to the mortgages and home loans out there.

Fixed-Rate Loan

A fixed-rate loan is usually 15 to 30 years long. During that period, borrowers pay the same payment and interest rate every month, no matter the interest rates. A fixed-rate loan offers stability as there is no possibility of the payment rising because of interest fluctuation. However, borrowers are locked in for a long amount of time.

Adjustable-Rate Mortgage

Just as the name says, adjustable-rate mortgages change according to interest rates after an initial stable period of several years. Initial rates tend to be lower than that of fixed-rate loans, and the repayment period is shorter. However, these loans are more volatile since they change according to interest rates.

FHA Loan

Unlike loans issued by private investors, a loan from the Federal Housing Administration requires a much lower down payment. Other than the down payment and an insurance requirement, FHA loans offer similar terms to fixed-rate loans. FHA loans are a good choice for home buyers who don’t have enough capital for a large down payment and are willing to handle some inflexibility.

VA Loan

VA loans offer excellent terms because borrowers do not need to make a down payment or buy insurance. However, these loans are only available to veterans.


A USDA loan is another type of government loan designated for struggling families in the countryside. USDA borrowers in rural areas get discounted rates and no down payment, but there are strict guidelines around debt load and insurance requirements.

Bridge Loan

The last type of home loan is a bridge loan. This loan acts as a bridge between an old and new home if borrowers have not sold their first home before buying a second one. The bridge loan allows borrowers to bundle mortgages on multiple houses and refinance once they sell one.

Depending on your finances and moving plans, one of these home loans may be right for you.