For most of us, a home will be one of the biggest purchases that we make in our lifetimes, but before we can begin shopping for our dream home we need to first consider how we’ll pay for it. Getting preapproved for a home mortgage is an important step that most homebuyers take before ever even viewing homes.

What is a Home Mortgage?

A home mortgage is a loan that a person secures in order to purchase or refinance a home. Like any loan, there are different types of mortgages available, and shopping for the right mortgage type can help to ensure that you get the best loan to fit your needs and could even help you to save money over the life of your loan. Different mortgage types will work better for borrowers based on a number of factors like credit scores, down payment size, and the length of time a borrower needs to repay their loan.

30-Year Fixed Rate

One of the most popular home mortgage loans is a 30-year fixed-rate mortgage.  This type of loan comes with a fixed interest rate that lasts for the entirety of the 30-year loan, and is a good option for homebuyers who are shopping when interest rates are low. Repaying your loan across 30 years does ultimately mean that borrowers will spend more in interest over the life of their loan, but their monthly payment will be smaller than that of a loan that must be repaid sooner.

15-Year Fixed Rate

A 15-year fixed-rate mortgage, then, is more popular with borrowers who would prefer to make larger monthly payments to avoid paying additional interest. Like the 30-year fixed-rate mortgage, this home mortgage option also locks in interest rates over the lifetime of the borrower’s loan.


Not all mortgage loans come with fixed interest rates. An adjustable-rate mortgage starts with an initial rate that remains fixed for a specified amount of time and then later adjusts periodically. The initial interest rate is usually lower than on most other loan types, resulting in lower monthly payments and is a good option for homebuyers who either don’t plan to live in the same home for very long, or who may be buying at a time when interest rates are higher and anticipate them lowering in the future. The initial interest rate can be locked in for one, five, seven, or even ten years.


Building credit scores and saving enough money for an initial down payment can be significant hurdles for people with lower incomes hoping to buy a home. For these types of borrowers, FHA mortgages may be the best option. These home mortgages are insured by the Federal Housing Administration. With an FHA mortgage, the initial down payment can be as low as 3.5% and borrowers with credit scores as low as 500 can qualify.


Meanwhile, borrowers looking to buy an expensive home may prefer to take out a jumbo mortgage. Jumbo home loans are mortgages above a certain amount, and these vary by county. This type of home mortgage can have either fixed or adjustable interest rates and often require a down payment of at least 10%. This type of loan is common in areas with high home values where average prices are on the higher end.

Researching the best options for you can make all the difference when it comes to saving money on your mortgage. And more than just home mortgage types, there are also a number of programs available specifically designed to make homeownership affordable for a wide range of different types of buyers. Partnering with the right lender can be an invaluable tool when it comes to getting the best possible home mortgage when you’re ready to start the homebuying process.