Understanding Mortgage Types: Fixed, Adjustable & Beyond

Mortgages can feel complicated, but understanding the basics helps you choose the right fit for your financial goals.

Fixed-Rate Mortgage

• Interest rate stays the same for the life of the loan.
• Predictable monthly payments.
• Best for: long-term homeowners.

Adjustable-Rate Mortgage (ARM)

• Interest rate starts lower, but can adjust after a set time (ex: 5/1 ARM = fixed for 5 years, then adjusts yearly).
• Risk: payments can rise significantly.
• Best for: short-term homeowners or investors.

FHA Loan

• Government-backed, low down payment (as little as 3.5%).
• Easier credit requirements.
• Best for: first-time buyers.

VA Loan

• For eligible veterans and service members.
• No down payment, no PMI.
• Best for: those who qualify.

USDA Loan

• For homes in eligible rural areas.
• No down payment, affordable terms.

👉 Bottom line: There’s no one-size-fits-all mortgage. The right one depends on your finances, future plans, and comfort level with risk.

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