What type mortgage

Best for: Refinancers and home buyers who want to build equity and pay off the loan faster. Payments are predictable because the interest rate doesn't change. Because the borrower pays interest for fewer years, total interest payments are less. See the pros and cons of adjustable-rate mortgages. Initial rates can often be locked for one, five, seven or 10 years.

FHA loans are backed by the government and designed to help borrowers of more modest means buy a home. See how FHA loans differ from conventional mortgages. Allows down payments as low as 3. Credit scores as low as can qualify.

Learn more about the credit score needed to buy a house. Mortgage insurance premium payments are required. VA loans are mortgages backed by the Department of Veterans Affairs and are available to military service members and veterans. See how VA loans work and who qualifies.

No down payment required. Upfront VA funding fee required. See this year's VA funding fee chart. No mortgage insurance. Best for: Military-qualified borrowers who appreciate a low interest rate and no down payment minimum. USDA home loans are mortgages backed or issued by the U. Department of Agriculture. See more about USDA loans and eligibility requirements. No down payment is required on most properties. Home improvement loans and grants are also available.

Income limits and property value caps apply. Best for: Income-qualified buyers in rural and some suburban areas who want a low or zero down payment. If so, crunch the numbers to ensure that you can potentially handle any payment increases up to that point. Don't count on being able to sell your home or refinance your mortgage before your ARM resets because market conditions—and your finances—could change. ARMs are a solid option if you don't plan to stay in a home beyond the initial fixed-rate period or know that you intend to refinance before the loan resets.

Interest rates for ARMs tend to be lower than fixed rates in the early years of repayment, so you could potentially save thousands of dollars on interest payments in the initial years of homeownership. Special programs sponsored by states or local housing authorities offer help specifically to first-time buyers. These programs, which usually offer assistance in the form of down payment grants, can also save first-time borrowers significant money on closing costs. Select your state and then choose "Homebuying Assistance" to find the program nearest you.

Mortgage lending discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take.

Many people falsely think FHA loans are available only to first-time buyers, but repeat borrowers can qualify as long as the buyer has not owned a primary residence for at least three years leading up to the purchase. Choosing the loan that's best for your situation relies primarily on your financial health: Your income, credit history and score, employment, and financial goals. Mortgage lenders can help analyze your finances to help determine the best loan products.

They can also help you better understand the qualification requirements, which tend to be complex. A supportive lender or mortgage broker may also give you homework—targeted areas of your finances to improve—to put you in the strongest position possible to get a mortgage and buy a home.

No matter which loan type you choose, check your credit report beforehand to see where you stand. From there, you can spot and fix errors, work on paying down debt, and improve any history of late payments before you approach a mortgage lender. To further protect your credit report from errors and other suspicious marks, consider utilizing one of the best credit monitoring services currently available.

It can be advantageous to pursue financing before you get serious about looking at homes and making offers. Fannie Mae. Freddie Mac. Accessed Feb. Consumer Financial Protection Bureau. Federal Housing Finance Authority. Federal Housing Finance Agency.

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