The Top 5 Most Common Mortgage Types, by a Colorado Loan Officer

When it comes to financing a home, finding the best Colorado loan officer is key to making the process smoother. With so many mortgage options out there, it’s easy to feel overwhelmed, whether you’re a first-time buyer or already a homeowner. To help you navigate your choices, here are the top five most common mortgage options to consider.

When it comes to financing a home, finding the best Colorado loan officer is key to making the process smoother. With so many mortgage options out there, it’s easy to feel overwhelmed, whether you’re a first-time buyer or already a homeowner. To help you navigate your choices, here are the top five most common mortgage options to consider.

1. Conventional Fixed-Rate Mortgage

A conventional fixed-rate mortgage is a popular choice because the interest rate stays the same for the life of the loan—whether it’s 15, 20, or 30 years. That means your monthly payments for principal and interest will stay predictable. This option is great for people who plan to stay in their homes long-term and want consistent payments.

2. Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage (ARM) starts with a lower interest rate for a set number of years, usually 5, 7, or 10. After that, the rate adjusts based on the market. ARMs are perfect if you’re planning to sell or refinance before the initial period ends. Just remember, after the fixed-rate period, your payments could go up.

3. FHA Loan

FHA loans are backed by the Federal Housing Administration and are a great option for first-time buyers or those with lower credit scores. With a down payment as low as 3.5%, this type of loan is easier to qualify for. However, keep in mind you’ll need to pay mortgage insurance, which adds to the overall cost.

4. VA Loan

If you’re a veteran, active-duty military member, or a surviving spouse, a VA loan could be your best bet. VA loans come with awesome perks like no down payment, no private mortgage insurance (PMI), and competitive interest rates. These loans are backed by the Department of Veterans Affairs and can save you a lot of money.

5. Jumbo Loan

Jumbo loans are for people buying high-end or luxury homes that exceed the loan limits set by the Federal Housing Finance Agency. In Colorado right now, that limit is $766,550. Jumbo loans usually come with stricter credit requirements, larger down payments, and slightly higher interest rates. If you’re in the market for a luxury property, this is likely your best option.

Whether you’re diving into residential real estate lending for the first time or you’re a seasoned buyer, it’s important to understand your options. Working with the best mortgage lenders in Denver can make a big difference. Plus, tools like a Colorado mortgage calculator with taxes can help you plan for the future. Ready to find out more? A qualified Colorado loan officer can help guide you to the best choice for your situation.