What are the Common Residential Purchase Loan Types

Standard Loans

1. Conventional Fixed-Rate Mortgages

2. Conventional Adjustable-Rate Mortgages (ARM)

US Government Backed Loans

1. FHA Loans (Federal Housing Administration)

2. VA Loans (Department of Veterans Affairs)

3. USDA Loans (U.S. Department of Agriculture)

Non-US Government Backed Loans

1. Jumbo Loans

2. Fixed-Rate Mortgages

3. Adjustable-Rate Mortgages (ARM)

4. Interest-Only Loans

5. Balloon Mortgages

6. Home Equity Loans

7. Bridge Loans

8. Construction Loans

9. Combo/Piggyback Loans

10. Energy-Efficient Mortgages (EEM)

11. Assumable Mortgages

12. Graduated Payment Mortgages (GPM)

13. HomeStyle Renovation Loans

As a Notary Signing Agent, I've had the privilege of witnessing individuals embark on the exciting journey of homeownership. One crucial aspect of this process is understanding the diverse array of residential loan types available. Let's embark on a journey through the lens of a Notary Signing Agent, shedding light on the various financing options that pave the way to that coveted front door.

Conventional loans are the bread and butter of residential financing. Fixed-rate mortgages offer stability with a consistent interest rate over the loan term. Meanwhile, Adjustable-Rate Mortgages (ARMs) introduce a dynamic element, allowing for periodic adjustments based on market conditions. The choice between the two often hinges on what your eligible for and what risk you want to take.

Federal Housing Administration (FHA) loans provide the reach of home purchasing to those with varying credit profiles. With lower down payment requirements and flexible eligibility criteria, they pave the way for first-time homebuyers and individuals seeking a financial assistance. Mrs. Gordon, the Assistant Secretary for Housing and Federal Housing Commissioner, had this to say in the FY Annual Management Report for 2023, "For the first time since 2014, FHA increased the Multifamily Large Loan limit threshold from $75 million to $120 million, which streamlines the process for lenders and borrowers engaged in rental home construction". For those who saved their money and didn't buy during 2023, 2024 is predicted to have better rates and more options. The trick is not being the first to buy but being prepared to buy. Starting the process by collecting your bank statements, w2 forms, reviewing your monthly finances and getting yourself in order to meet with real estate agents and lenders is crucial to be able to pull the trigger when you find the dream home/investment property. I said find, not come, because in 2024 everyone will have already prepared to pull the trigger so don't be amongst the ones who weren't prepared. That's it.

For our nation's heroes, VA loans stand tall. Backed by the Department of Veterans Affairs, these loans extend a helping hand to eligible veterans, active-duty service members, and their spouses. With favorable terms and often no down payment required, VA loans honor those who have served with a pathway to homeownership.

The U.S. Department of Agriculture (USDA) lends a hand to those seeking homes in rural and suburban areas. Boasting low-interest rates and zero-down payment options, USDA loans nurture homeownership in communities where green pastures meet the horizon.

For those dreaming of expansive homes that transcend conventional limits, jumbo loans step in. These loans cater to high-value properties, offering financing solutions that match the grandeur of your homeownership aspirations.

Beyond the familiar terrain, a myriad of specialized loans awaits. Interest-Only Loans, Balloon Mortgages, and Home Equity Loans present tailored solutions for unique financial scenarios. Whether deferring principal payments, managing short-term financing needs, or tapping into home equity, these options add nuance to the residential financing landscape.

With a focus on sustainability, Energy-Efficient Mortgages (EEM) propel homeowners into an eco-friendly future. By financing energy-efficient improvements, these loans align homeownership with environmental stewardship.

As the real estate landscape evolves, so do financing options. Assumable Mortgages, Graduated Payment Mortgages (GPM), and HomeStyle Renovation Loans showcase the adaptability of residential financing. Whether stepping into existing mortgages, navigating changing payment structures, or funding transformative renovations, these options echo the dynamic nature of homeownership.

In conclusion, whether you're signing the commitment of a fixed-rate mortgage, saluting the service of a VA loan, or embracing the flexibility of an innovative financing solution, remember that each signature is a testament to the exciting journey toward that cherished place called home. 

As a Notary Signing Agent, I am honored to play a small part in facilitating these dreams, ensuring that the road to homeownership is paved with knowledge, clarity, and the promise of a bright future. Don't get bogged down by the different residential loan types above because there even more residential loan types. Remember to READ YOUR CLOSING DISCLOSURE, that's why your lender spent their time gathering and processing your information so that it would be digestible in 5 pages for you. The TILA-RESPA integrated disclosures (TRID) went into effect in 2015 but citizens still get confused as to what it holds and what to look for. Here is a copy of a sample document filled out for a Conventional Fixed-Rate Mortgage by the Consumer Financial Protection Bureau (cfpb - sample closing disclosure). If you have more questions the U.S. Department of Housing and Urban Development is always a good place to gather information about how to purchase a home (HUD - Buying a Home).

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