Shop for the mortgage that fits your needs. If you need or want to shop around, however, you should know about the different kinds of mortgage loans and where you can get them.

Three kinds of mortgages available to homebuyers today.

1. Conventional mortgages

Two‑party affairs between you and the lender. Generally, conventional loans are more easily available and more flexible than the other two kinds. Anybody can apply. At present, there is no maximum loan amount. Down payments will vary between 5% and 25% with a federally insured savings and loan association. There are many types of Adjustable Mortgage loans in the area. Ask your AgentOwned Realtor for the details.

2. Mortgages guaranteed by the Veteran Administration (VA)

Three‑party affairs in which the VA guarantees repayment of part of the loan to the lender in the event of a default. To get this so‑called loan you have to be a qualified veteran of military service. There is no maximum mortgage amount. The sale price of the home and your income determine the limits.

3. Federal Housing Authority (FHA)

The main advantage to an FHA home loan is that the credit criteria for a first-time borrower are not as strict as Conventional Loans sold to Fannie Mae (FNMA) or Freddie Mac (FHLMC). Someone who may have had a few credit problems or no traditional credit should not have a problem obtaining FHA financing. Also, FHA home loans are assumable, allowing a person to take over the mortgage without the additional cost of obtaining a new loan. In addition, the seller or lender must pay for part of the "traditional" closing costs (called non-allowable costs) while a borrower's allowable costs can partially be wrapped into the loan. The monthly mortgage insurance premium is cheaper for an FHA loan versus a conventional loan with 3% down. Finally, FHA loans may require less income to qualify as they will exceed the Conventional debt ratios of 28/36% as their standard is 29/41%.

WHERE TO APPLY FOR A LOAN...

All three types of loans are arranged through private lenders. The main sources are savings and loan associations, mortgage companies, mutual savings banks, and commercial banks. Your AgentOwned Realtor can help you by arranging for you to meet with a loan officer. AgentOwned Realty also has a mortgage counselor in the office to assist you in finding the best loan possible for your needs.

Use this calculator to determine how much house you can afford. By entering details about your income, down payment, and monthly debts, you can estimate the mortgage amount that works with your budget.

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