When you are buying a new home, you not only have to choose the right house and the right neighborhood, you also have to select the right mortgage. There is no “one-size-fits-all” when it comes to mortgage loans, which is why banks and lenders offer several options for financing the purchase of a home.

Which type of loan is best for you will depend on your budget and your goals. Maybe low monthly payments are your top priority, or you want to pay off your loan as quickly as possible while keeping interest payments to a minimum. Whatever your budget, credit, and objectives, there is most likely a mortgage loan that fits the bill.

We always recommend buyers speak directly with their preferred lender or broker to get a personalized recommendation for a home loan type, but it doesn’t hurt to do some general research ahead of the preapproval process. Read on for six of the most common types of mortgage loans.

30-Year Fixed-Rate Mortgage

The most common type of mortgage loan, a 30-year fixed-rate mortgage is well-suited for those who want predictability as well as low monthly payments. The interest rate will remain the same over the life of the loan (though you can always try to refinance) and the extended duration of the loan means that payments are stretched out over a long period. You can, however, make larger payments and pay off the loan quicker if you can or want to.

With the longer term of the loan comes higher interest rates than you might see with shorter loans, and you will wind up paying more interest as the years go by.

15-Year Fixed-Rate Mortgage

With a more abbreviated time frame, a 15-year fixed-rate mortgage is a good option for those who want to build equity quicker and pay off their loan faster. Higher monthly payments and lower overall interest payments are attractive features of this loan.

Adjustable-Rate Mortgage

As the name implies, the interest rate in an adjustable-rate mortgage can change over time. The initial interest rate is set for a specific period such as one, five, or ten years, after which it can fluctuate with the prevailing interest rate, sometimes wildly. This can be a positive if interest rates fall but can be an unpleasant development if they rise. This type of loan is often suited for folks who do not anticipate owning their home for a long time, have lower credit scores, or believe that interest rates will go down instead of up in the years ahead.

FHA Mortgage

Insured by the Federal Housing Administration, this type of mortgage was designed to help lower-income Americans afford to buy a home. FHA loans accomplish this through lower down payments (as low as 3.5 percent of the purchase price) and qualification with lower credit scores. They require the payment of mortgage insurance premiums regardless of the amount of the down payment, have strict loan limits, and require more stringent appraisals.

VA Mortgage

For veterans who’ve served 90 consecutive days during wartime, 180 days during peacetime, or who spent six years in the reserves, a VA mortgage can facilitate the purchase of a home with no down payment and no mortgage insurance required. These loans are guaranteed by the U.S. Department of Veterans Affairs (VA) and are issued by a private lender, such as a bank, credit union, or mortgage company.

Bridge Loan

As the name implies, a bridge loan bridges the gap between buying a new home and selling an existing one. It is a short-term loan that uses the equity from your current home to provide you with the funds you need to make an offer on a new one. With a bridge loan, you have the freedom to move on your own terms and secure a new house when you need to, without having to wait for your old home to sell.

To make bridge loans even more accessible and affordable, we offer qualifying clients Compass Bridge Loan Advance.

When you work with a Compass agent, such as the Z Chicago team, to sell your current home, you can get up to six months of your bridge loan payments and other associated costs fronted — an exclusive offering for Compass clients, regardless of the lender you use.

At Z Chicago, we have a network of top-rated mortgage lenders and brokers who can match you to a home loan that best suits your lifestyle. Please contact us to learn more.