If you are considering buying a home on a mortgage, make sure to first familiarize yourself with the different types of home loans available. Where you live, your employment type, and how long you intend to stay in the home, among other factors, make certain types of home loans better suited than others. Here are the 5 major types of home loans that are available.

FHA Loans

These loans are supported by the Federal Housing Administration. FHA loans require borrowers to make a down payment of just 3.5%, and, as a result, are ideal for individuals who cannot make the regular 20% down payment. However, if you get an FHA loan, you will need to mandatorily get mortgage insurance.

Fixed-Rate Loans

Fixed-rate loans are conventional loans where the interest rate remains fixed for the duration of the loan tenure. If you intend to live in your home for a long time, this type of loan is a good choice.

Adjustable-Rate Mortgage

Adjustable-rate mortgages are also a type of conventional mortgage, however, the interest rate fluctuates, typically at least once every year. While the interest rate is usually low in the beginning, it can increase over time, making this a good choice if you intend to sell your home soon.

USDA Loan

The USDA Rural Development loan is another government-backed loan that is especially meant for those living in rural areas. The government offers 100% financing and a discounted interest rate. The only catch is that your debt load will need to be under 41% of your total income. You’ll also have to get mortgage insurance.

VIA Loan

If you are currently serving in the Armed Forces or are a veteran, you may be eligible to get a Veterans Affairs loan. VA loans don’t require any down payment or mortgage insurance. The loan, however, does have certain conditions. For instance, you can only qualify for a VA loan if the home you are purchasing is your primary residence. Also, the property should meet the minimum property requirements.

Regardless of which type of home loan you choose to go ahead with, ensure that you do your research and opt for the most suitable type of loan.