Loan Types

Loan types explain how a mortgage is structured and which borrower or property situations it is designed to fit. Some differences are about rate behavior, such as a Fixed-Rate Mortgage versus an Adjustable-Rate Mortgage (ARM). Others are about program rules, such as Conventional Loan, FHA Loan, VA Loan, and USDA Loan.

Start here after you understand the core borrowing terms in Mortgage Basics. Loan-type pages make more sense once principal, interest, payment, amortization, and lender roles are already clear.

The first high-value comparisons for most readers are fixed versus adjustable, conventional versus government-backed, and standard conforming borrowing versus Jumbo Loan situations.

This section also covers special structures such as Assumable Mortgage, where the borrower may step into an existing loan rather than always starting from a brand-new mortgage.

In this section

• Fixed-Rate Mortgage
  A fixed-rate mortgage keeps the interest rate stable for the scheduled term of the loan.
• Adjustable-Rate Mortgage (ARM)
  An adjustable-rate mortgage starts with one rate structure and can reset later based on its contract terms.
• Interest-Only Mortgage
  An interest-only mortgage lets the borrower pay only interest for a period before principal repayment fully begins.
• Jumbo Loan
  A jumbo loan is a mortgage that exceeds the conforming loan limits used for standard agency-backed lending.
• Assumable Mortgage
  An assumable mortgage is a loan structure that may allow a new borrower to take over an existing mortgage instead of replacing it with a new loan.
• Conventional Loan
  A conventional loan is a mortgage that is not directly backed by FHA, VA, or USDA insurance or guarantee programs.
• FHA Loan
  An FHA loan is a mortgage made by an approved lender and insured through the Federal Housing Administration.
• VA Loan
  A VA loan is a mortgage for eligible borrowers that uses a U.S. Department of Veterans Affairs guarantee structure.
• USDA Loan
  A USDA loan is a mortgage program tied to eligible rural or qualifying areas and borrower eligibility rules.
• Conforming Loan
  A conforming loan meets the size and rule framework used for standard agency-backed mortgage eligibility.
• Non-Conforming Loan
  A non-conforming loan falls outside standard conforming limits or guidelines used in the mainstream agency-style market.
• Reverse Mortgage
  A reverse mortgage lets an eligible homeowner borrow against home equity without a standard monthly repayment pattern during occupancy.
• Balloon Mortgage
  A balloon mortgage requires a large remaining balance to be paid in one lump sum at a set point before full long-term amortization finishes.