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'I Wish I Knew This Earlier': 6 Loan Types You Should Know About

• David (Viacheslav) Davidenko

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Ever felt overwhelmed by mortgage terminology and loan options? You're not alone. In this comprehensive exploration of residential real estate loans, we cut through the complexity to help you understand the financing tools that can make or break your homeownership journey.

We start by examining the fundamental choice between fixed-rate and adjustable-rate mortgages, revealing why fixed-rate loans dominate the market despite occasional surges in ARM popularity. Did you know ARM mortgages plummeted from nearly 50% market share in 2005 to just 2% after the 2008 housing crisis? We explore why this happened and when each option makes strategic sense for different homebuyers.

The conversation flows through conventional loans (the backbone of mortgage lending at 77% of new home purchases), government-backed options like FHA, VA, and USDA loans (making homeownership accessible to those who might otherwise be excluded), and jumbo loans for high-value properties. Each loan type serves specific needs and borrower profiles, and we carefully outline who benefits most from each option.

For existing homeowners, we decode the differences between home equity loans and lines of credit (HELOCs), explaining why HELOC balances have grown for three consecutive years as homeowners seek to leverage their equity without sacrificing their advantageous primary mortgage rates. Senior homeowners will appreciate our breakdown of reverse mortgages - how they work, who they benefit, and important considerations before moving forward.

Whether you're a first-time buyer, looking to move up, downsizing, or wanting to tap into your home's equity, understanding these financial tools is crucial to making decisions that align with your long-term goals. Forget the jargon and confusion - this episode gives you the knowledge to approach your next real estate transaction with confidence and clarity.

What mortgage questions have been keeping you up at night? Share them with us and subscribe for more financial insights that make complex topics accessible.

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Disclaimer: The content provided on this channel is intended for educational and informational purposes only and does not constitute investment, financial, or tax advice. We strongly recommend that you consult with qualified professionals before making any financial decisions. Past performance of investments is not indicative of future results. The information presented here is not a solicitation or offer to buy or sell any securities or investments. Our firm may have conflicts of interest, and we do not guarantee the accuracy or timeliness of the content provided. Investing involves risks, and you should carefully consid...

Speaker 1:

Okay, so you know how we all get bombarded with all this stuff about real estate loans.

Speaker 2:

Yeah.

Speaker 1:

It's a huge part of so many people's lives, right? Yes, whether you're like buying your first place, or moving, or upsizing or downsizing, or just trying to figure out how all of this it's amazing. Home ownership, financial stuff even works.

Speaker 2:

Yeah.

Speaker 1:

So we're going on a deep dive today.

Speaker 2:

Okay.

Speaker 1:

To really just try to cut through the complexity.

Speaker 2:

Okay.

Speaker 1:

And look at all the different types of residential real estate loans.

Speaker 2:

Yeah.

Speaker 1:

So what makes each one kind of unique?

Speaker 2:

Okay.

Speaker 1:

When do they typically come into play, yep, and who are they a good fit for?

Speaker 2:

That's right. Understanding these options is so important because it's not just about getting a loan Right. It's about actually making an informed decision that aligns with your goals. Whether you're just starting out or maybe you're looking at, like, how can I use my equity I already have in my home, your sources actually cover a really comprehensive range.

Speaker 1:

They do.

Speaker 2:

From the basic mortgages everyone thinks of to some really interesting tools.

Speaker 1:

Comprehensive range they do From the basic mortgages everyone thinks of.

Speaker 2:

Yeah To some really interesting tools like home equity lines of credit.

Speaker 1:

Right.

Speaker 2:

And even reverse mortgages yeah, for seniors, yeah.

Speaker 1:

OK. So why don't we just jump right in Right With kind of what feels like the cornerstone for most people?

Speaker 2:

OK.

Speaker 1:

Fixed rate versus adjustable rate mortgages. So fixed rate mortgages they seem like the dependable, like workhorse of the home lending world.

Speaker 2:

They really are Right. The core advantage is that fixed interest rate.

Speaker 1:

Right.

Speaker 2:

And monthly payment for the life of the loan.

Speaker 1:

For the entire loan.

Speaker 2:

Yeah, usually it's like 15 or 30 years.

Speaker 1:

Right 15 or 30 years.

Speaker 2:

That predictability is so helpful for budgeting and, you know, long-term planning.

Speaker 1:

It really takes a lot of the uncertainty out, doesn't it? Because you lock in that rate. Let's say it's six and a half percent. That's your interest for the next 15 or 30 set.

Speaker 2:

That sounds perfect for people who plan to stay in their home for a while.

Speaker 1:

Exactly If you're putting down roots.

Speaker 2:

Yeah.

Speaker 1:

That's a great option.

Speaker 2:

Okay, so then on the flip side.

Speaker 1:

Yeah, the other side of the coin.

Speaker 2:

We have adjustable rate mortgages.

Speaker 1:

Adjustable rate mortgages, or RRMs.

Speaker 2:

RRMs.

Speaker 1:

Yeah, these start with a fixed rate.

Speaker 2:

Okay.

Speaker 1:

For an initial period. Okay, maybe For an initial period Okay, maybe like five, seven or 10 years.

Speaker 2:

Okay.

Speaker 1:

But after that the rate starts to adjust based on what's happening in the market. So, you might see like a 51 ARM.

Speaker 2:

A 5-1. Yeah where it's fixed for the first five years and then it adjusts every year after that. So the initial draw then is that you could get a lower interest rate.

Speaker 1:

Potentially a lower rate.

Speaker 2:

Yeah.

Speaker 1:

And that means lower payments.

Speaker 2:

For that initial period Right in that fixed period exactly. Yeah, this seems like it would be appealing.

Speaker 1:

Yeah.

Speaker 2:

If interest rates in general are really high.

Speaker 1:

Yeah, that's one situation where it could be attractive.

Speaker 2:

Or maybe if you don't think you're going to be in the house that long, Right, right, you're only going to go down, okay, well, I found this really interesting. Okay.

Speaker 1:

Back in 2005,. Arms made up almost half Wow Of all the mortgages.

Speaker 2:

Almost half.

Speaker 1:

But then after the 2008 crash.

Speaker 2:

Oh yeah.

Speaker 1:

Their share plummeted to like 2%.

Speaker 2:

That's a huge shift.

Speaker 1:

That's a big difference.

Speaker 2:

Yeah, it shows how people's preferences changed.

Speaker 1:

Yeah.

Speaker 2:

I think that shows that there's some risks with ARMs.

Speaker 1:

Yeah.

Speaker 2:

Especially if rates go up unexpectedly.

Speaker 1:

Yeah, then your payments go up.

Speaker 2:

Yeah, and people might not be able to afford that Right, but, like your sources point out, yeah. That initial lower rate can still be a good option in certain situations.

Speaker 1:

Yeah.

Speaker 2:

It depends on how much risk you're comfortable with.

Speaker 1:

That's a good way to put it.

Speaker 2:

And how you think about the trade-offs between saving money now versus having that certainty later.

Speaker 1:

Right.

Speaker 2:

Especially in a crazy economy Right Like we've been having.

Speaker 1:

So if we think about who each type is good for, Okay. It sounds like fixed rate is better for people who just want to know what their payment is.

Speaker 2:

If you really value stability.

Speaker 1:

Yeah, and long-term security.

Speaker 2:

Yeah, if you want to know exactly what your payment's going to be for the next 15 or 30 years, then a fixed rate is probably the best choice.

Speaker 1:

Okay, so when would an ARM?

Speaker 2:

Yeah, when would an ARM be a good choice, be a better fit? So your sources suggest a couple situations.

Speaker 1:

Okay. So when would an ARM yeah, when would an ARM be a good choice, be a better fit?

Speaker 2:

So your sources suggest a couple of situations. Okay, maybe, if you're planning on moving soon. Okay, like before that fixed rate period ends, right? Or if you're betting that rates are going to go down.

Speaker 1:

Okay.

Speaker 2:

And you're going to refinance before they start adjusting.

Speaker 1:

Interesting.

Speaker 2:

We actually saw a little bump in ARM popularity in 2022 and 2023.

Speaker 1:

Why was that?

Speaker 2:

Well, 30-year fixed rates went way up like from around 3% to over 7%.

Speaker 1:

Wow.

Speaker 2:

So some people wanted that lower initial payment Right, even though they knew it could change later.

Speaker 1:

Even though it was risky.

Speaker 2:

Exactly, but even then, fixed rate loans are still way more common Still the most popular.

Speaker 1:

Yeah, most people choose. Fixed rate. Loans are still way more common, still the most popular.

Speaker 2:

Yeah, most people choose fixed rate.

Speaker 1:

Okay, that makes sense.

Speaker 2:

Yeah.

Speaker 1:

So that's a good overview of fixed versus adjustable Right. So let's move on to conventional home loans. Okay, the sources describe these as like your standard mortgage.

Speaker 2:

Your basic mortgage.

Speaker 1:

Yeah, that doesn't have any kind of insurance backing.

Speaker 2:

Right, no government backing From the government. Yeah.

Speaker 1:

And the most common type of this is a conforming loan.

Speaker 2:

Yes, a conforming loan.

Speaker 1:

So what is that?

Speaker 2:

So conforming loans follow rules set by Fannie Mae and Freddie Mac.

Speaker 1:

Oh OK.

Speaker 2:

They're these big government-sponsored enterprises. Ok, and one of those rules is a limit on the size of the loan. Ok, and one of those rules is a limit on the size of the loan OK so for 2025,. That limit is around eight hundred and six thousand five hundred dollars. Ok For a single family home in most areas. Ok, but it could be higher in expensive places.

Speaker 1:

OK, like where.

Speaker 2:

Like San Francisco or New York. Ok, it can go up to one point two, one million.

Speaker 1:

Wow, that's still a limit.

Speaker 2:

Right, it's a high limit.

Speaker 1:

Yeah.

Speaker 2:

But it's still a limit.

Speaker 1:

So what happens if you?

Speaker 2:

Then you get a jumbo loan. Jumbo loan We'll talk about those later. Okay, but basically this whole conforming loan system.

Speaker 1:

Yeah.

Speaker 2:

It lets Fannie and Freddie buy these loans from lenders.

Speaker 1:

Oh.

Speaker 2:

Which helps make more money available for mortgages. I see Across the whole country.

Speaker 1:

So for a conventional loan.

Speaker 2:

Yeah.

Speaker 1:

What are the requirements usually?

Speaker 2:

Usually you need a good credit score.

Speaker 1:

Like what's good.

Speaker 2:

Mid credit score.

Speaker 1:

Like what's good, mid 600s or higher.

Speaker 2:

Okay, and a down payment of at least three to five percent. Three to five, yeah. But a lot of people put down 20 percent.

Speaker 1:

Why is?

Speaker 2:

that Well, if you put down 20 percent.

Speaker 1:

Yeah.

Speaker 2:

You don't have to pay PMI.

Speaker 1:

PMI.

Speaker 2:

Yeah, private mortgage insurance.

Speaker 1:

Oh right, that's that extra cost.

Speaker 2:

Exactly, it can add up.

Speaker 1:

So is there an advantage to conventional loans?

Speaker 2:

Yeah, one big advantage is that you can get a lower interest rate.

Speaker 1:

Oh OK.

Speaker 2:

If you have good credit. So if you're a good borrower, Right Lenders see you as less risky.

Speaker 1:

Yeah.

Speaker 2:

And that means better rates.

Speaker 1:

Yeah.

Speaker 2:

Conventional loans are actually really popular.

Speaker 1:

How popular.

Speaker 2:

In late 2023, like 77 percent of new homes.

Speaker 1:

Wow.

Speaker 2:

Were financed with conventional loans.

Speaker 1:

That's most of them.

Speaker 2:

It's the most common type.

Speaker 1:

Okay, so who should get a conventional loan?

Speaker 2:

Anyone with good credit and some money for a down payment.

Speaker 1:

Okay.

Speaker 2:

Whether it's your first home or your fifth.

Speaker 1:

Yeah.

Speaker 2:

Unless you need a government program, right, or you're buying something super expensive Okay, that needs a jumbo loan, right. Then conventional is probably a good fit.

Speaker 1:

OK, let's talk about those government backed loans.

Speaker 2:

OK, those are interesting.

Speaker 1:

Yeah, so we have the FHA.

Speaker 2:

The VA.

Speaker 1:

VA, the UA and the USDA.

Speaker 2:

These seem to be for people who, yeah, don't quite fit the mold.

Speaker 1:

They are. They're designed to help people, yeah, who might not qualify for a conventional loan.

Speaker 2:

OK.

Speaker 1:

So they have lower down payments or easier rules, okay, the government agencies.

Speaker 2:

Okay.

Speaker 1:

Like FHA, va and USDA.

Speaker 2:

They basically insure or guarantee these loans.

Speaker 1:

Okay.

Speaker 2:

So the lenders aren't taking as much risk.

Speaker 1:

I see.

Speaker 2:

And that means more people can qualify.

Speaker 1:

That makes sense.

Speaker 2:

Yeah.

Speaker 1:

So let's start with FHA FHA loans. What are the key things there?

Speaker 2:

FHA loans are good if you have a lower credit score.

Speaker 1:

Okay.

Speaker 2:

Or you haven't saved up a lot for a down payment.

Speaker 1:

Okay.

Speaker 2:

You could put down as little as three and a half percent Okay With a credit score of 580 or higher.

Speaker 1:

That's a lot lower.

Speaker 2:

It is. It's a lot more accessible. Okay, but there's a catch.

Speaker 1:

Okay, what's the catch?

Speaker 2:

You have to pay mortgage insurance premiums.

Speaker 1:

Oh, right, like PMI.

Speaker 2:

Yeah, it's similar to PMI.

Speaker 1:

Okay.

Speaker 2:

But it's a little different.

Speaker 1:

How is it different?

Speaker 2:

The structure and how long you pay it can be different.

Speaker 1:

Okay.

Speaker 2:

But the idea is the same.

Speaker 1:

To protect the lender.

Speaker 2:

Right, because you're putting down less money up front.

Speaker 1:

Okay.

Speaker 2:

So there's more risk for them. Okay, but FHA loans are pretty popular.

Speaker 1:

Yeah.

Speaker 2:

Over 753,000 of them were made in 2023.

Speaker 1:

Wow.

Speaker 2:

And there are limits on how much you can borrow, and those limits depend on where you live.

Speaker 1:

Okay.

Speaker 2:

So you have to check those limits.

Speaker 1:

So it's more accessible. Yeah, but there's mortgage insurance, right, okay. What about VA loans?

Speaker 2:

VA loans are a fantastic benefit. For who For veterans and active duty military.

Speaker 1:

Okay.

Speaker 2:

And some surviving spouses. Okay, one great thing is you can get a zero down payment.

Speaker 1:

You don't have to put any money down.

Speaker 2:

Nope, not necessarily Wow, and there's no ongoing PMI.

Speaker 1:

That's a big deal.

Speaker 2:

It is. It can save you a lot of money. Yeah, and the rates are usually really low. Okay, and they're a little more flexible on credit scores.

Speaker 1:

Like what kind of score?

Speaker 2:

You can sometimes qualify with a score as low as 620.

Speaker 1:

That's pretty low.

Speaker 2:

It is. It's a lot more accessible. There might be an upfront fee. It's called the VA funding fee, but it can vary, but overall it's an amazing program. In 2023, there were about 377,000 VA purchase loans made.

Speaker 1:

Wow, so people are definitely using them.

Speaker 2:

Yeah, it's a popular benefit, but you can only use them for your primary residence.

Speaker 1:

Oh, okay, not a second home.

Speaker 2:

Not a second home or an investment property.

Speaker 1:

Okay.

Speaker 2:

It's for your main home.

Speaker 1:

Okay, so you have to live there.

Speaker 2:

Yeah, you have to live there. Okay, and to get a VA loan you need a certificate of eligibility from the VA.

Speaker 1:

The Department of Veterans Affairs.

Speaker 2:

Right, so you have to get that first.

Speaker 1:

And then we have USDA loans.

Speaker 2:

USDA loans.

Speaker 1:

This is one that I think a lot of people don't know as much about.

Speaker 2:

They're specifically for rural and suburban areas. They help low to moderate income buyers and they also offer zero down payment.

Speaker 1:

No down payment.

Speaker 2:

Like the VA loans.

Speaker 1:

Okay.

Speaker 2:

But you have to meet certain income limits.

Speaker 1:

Okay.

Speaker 2:

And the house has to be in an eligible area.

Speaker 1:

Okay.

Speaker 2:

So you can't buy just any house with the USDA loan.

Speaker 1:

So there are some restrictions.

Speaker 2:

Yeah, there are some restrictions, but the rates are usually pretty good. Okay, so it's a good option if you qualify.

Speaker 1:

So it sounds like if you're a first-time homebuyer, right, or you have certain circumstances like you're a veteran or you want to live in a rural area? Yeah, these government-backed loans are a really great option.

Speaker 2:

Yeah, they help a lot of people.

Speaker 1:

They open up homeownership to more people.

Speaker 2:

Exactly.

Speaker 1:

Okay, so now let's talk about the more expensive houses.

Speaker 2:

The expensive houses.

Speaker 1:

Yeah, the ones that cost more than that limit.

Speaker 2:

Right more than that conforming loan limit.

Speaker 1:

Yeah, that $806,500.

Speaker 2:

Right in most areas.

Speaker 1:

So that's where jumbo loans come in.

Speaker 2:

That's right. Jumbo loans.

Speaker 1:

Okay, so why are they different?

Speaker 2:

Well, because they're bigger than that limit.

Speaker 1:

Yeah.

Speaker 2:

Fannie and Freddie can't buy them. Oh, okay, so the lender is taking on more risk.

Speaker 1:

Makes sense. So that means they have stricter rules for borrowers.

Speaker 2:

It can be harder Okay. They can be fixed or adjustable Okay, and they usually have 30-year terms Okay. But you usually need really good credit.

Speaker 1:

Like how good.

Speaker 2:

A score of 700 or higher, wow, and a big down payment.

Speaker 1:

Like how big.

Speaker 2:

Usually 15 to 20% or more.

Speaker 1:

Wow so a lot more.

Speaker 2:

Yeah, a lot more.

Speaker 1:

So this isn't for like first time home buyers.

Speaker 2:

Not usually.

Speaker 1:

Yeah.

Speaker 2:

Jumbo loans are more common in expensive areas. Okay, like those big cities we talked about. Right, san Francisco, new York, yeah Like those big cities we talked about Right San Francisco, New York yeah. Where even a small house can cost more than that limit.

Speaker 1:

So if you're buying in those areas, you just need to know about jumbo loans.

Speaker 2:

You have to understand them.

Speaker 1:

Yeah.

Speaker 2:

Because you might need one.

Speaker 1:

Okay, so now let's switch gears a bit and talk about people who already own a home.

Speaker 2:

Okay, homeowners. Yeah, and they've built up equity Right. They have some value in their home.

Speaker 1:

Yeah, so the sources talk about ways to tap into that equity.

Speaker 2:

To war against it.

Speaker 1:

Yeah, like HELOCs and home equity loans.

Speaker 2:

HELOCs and home equity loans. Okay, these are good tools. Yeah, if you need money.

Speaker 1:

Okay.

Speaker 2:

And you could use your house as collateral.

Speaker 1:

Like a second mortgage.

Speaker 2:

Yeah, basically a second mortgage. Yeah, basically a second mortgage.

Speaker 1:

Okay, so let's start with home equity loans.

Speaker 2:

Okay, home equity loans.

Speaker 1:

What are those?

Speaker 2:

So with a home equity loan you get a lump sum of money up front. Okay, All at once.

Speaker 1:

Okay.

Speaker 2:

And then you pay it back. Okay, over a set period of time, okay, with a fixed interest rate. So you know exactly what you're paying.

Speaker 1:

Yeah.

Speaker 2:

Every month.

Speaker 1:

So that's good for what?

Speaker 2:

That's good for big expenses, okay, where you want to know exactly what your payment is.

Speaker 1:

Like a renovation.

Speaker 2:

Yeah, like a big home renovation.

Speaker 1:

Okay.

Speaker 2:

Or maybe a medical bill.

Speaker 1:

So H-E-L-O-C is different.

Speaker 2:

E-L-O-C is a little different. How so?

Speaker 1:

It's more like a credit card.

Speaker 2:

Oh, up to that limit over a certain period, usually about 10 years. That's called the draw period.

Speaker 1:

The draw period.

Speaker 2:

Yeah, and the interest rate's usually variable.

Speaker 1:

Meaning it changes.

Speaker 2:

Yeah, it can go up or down.

Speaker 1:

Based on what?

Speaker 2:

Based on market conditions and you only pay interest on the amount you've actually borrowed. So that's good for it's good for ongoing expenses or things you can't predict, like home repairs or medical bills or maybe college tuition.

Speaker 1:

So it's more flexible. Yeah, it's more flexible Than a home equity loan.

Speaker 2:

Than a home equity loan.

Speaker 1:

Okay.

Speaker 2:

And ELLs are getting more popular Really, yeah, because a lot of people have a lot of equity in their homes.

Speaker 1:

Right, because houses have gone up in value.

Speaker 2:

Exactly, and they have low interest rates on their first mortgage.

Speaker 1:

Right, so they don't want to refinance.

Speaker 2:

Right, they want to keep that low rate. Yeah, so a HLLC lets them access cash.

Speaker 1:

Without refinancing, without refinancing. Okay.

Speaker 2:

And your sources say that in 2024,.

Speaker 1:

HLLC balances grew by about 7%. Wow, and that's the third year in a row they've gone up, so people are using them.

Speaker 2:

More People are using them more.

Speaker 1:

But there's a big warning here, right.

Speaker 2:

Yeah, a big warning.

Speaker 1:

About both of these options.

Speaker 2:

Both AGLOs and home equity loans.

Speaker 1:

Yeah.

Speaker 2:

They're secured by your home, meaning if you don't pay, yeah, you could lose your house.

Speaker 1:

Oh, wow.

Speaker 2:

Yeah, so you have to be careful.

Speaker 1:

So use the money wisely.

Speaker 2:

Use it wisely, don't go crazy, don't go crazy. Okay, so let's talk about reverse mortgages now Okay. Reverse mortgages. This is for. These are for seniors. Seniors People 62 and older.

Speaker 1:

Okay, they let you access your equity, yeah, without making monthly payments, oh wow. So how does that work?

Speaker 2:

Basically, you're converting your equity.

Speaker 1:

Yeah.

Speaker 2:

Into cash.

Speaker 1:

Okay.

Speaker 2:

You can get the money in a few ways. Okay, a lump sum, okay, monthly payments Okay, or a line of credit.

Speaker 1:

Oh, wow.

Speaker 2:

So you have some choices.

Speaker 1:

And then what about repayment?

Speaker 2:

You don't usually have to repay, okay, until you sell the house Okay, or move out permanently Okay, or pass away, I see and usually the loan is paid back.

Speaker 1:

Yeah.

Speaker 2:

From the sale of the house. Okay, so this is for people who, this is for people who need extra money in retirement but they want to stay in their home. They have a lot of equity, but maybe not a lot of cash.

Speaker 1:

So they're house rich but cash poor. Exactly Okay, but they still have to pay.

Speaker 2:

Yeah, they still have to pay their property taxes and their homeowner's insurance and keep the house in good shape.

Speaker 1:

Otherwise they.

Speaker 2:

Otherwise they could default on the loan Okay and potentially lose their home.

Speaker 1:

So there's still some responsibility.

Speaker 2:

Yeah, there's still some responsibility.

Speaker 1:

Okay, so reverse mortgages were really popular.

Speaker 2:

Yeah, they were really popular when interest rates were low. Okay, like in 2022, there was a record number of HECMs.

Speaker 1:

What's a HECM A?

Speaker 2:

HECM is a home equity conversion mortgage. Okay, it's the most common type of reverse mortgage.

Speaker 1:

Okay.

Speaker 2:

And it's insured by the FHA.

Speaker 1:

Okay.

Speaker 2:

So it's a government program, okay, but when rates went up in 2023, they weren't as popular.

Speaker 1:

So what are some things to think about?

Speaker 2:

Well, if you're thinking about a reverse mortgage, you need to understand that it reduces your equity.

Speaker 1:

Okay.

Speaker 2:

So your heirs will get less. And there are fees.

Speaker 1:

Like, what kind of fees?

Speaker 2:

Like origination fees and mortgage insurance premiums Okay, and servicing fees.

Speaker 1:

So those can add up.

Speaker 2:

They can add up.

Speaker 1:

Okay.

Speaker 2:

And if you're getting a short ECM, you have to talk to a counselor. Really, yeah, it's required. Why is that? To make sure you understand the loan before you sign anything.

Speaker 1:

That's a good idea.

Speaker 2:

It protects seniors.

Speaker 1:

So we've covered a lot today.

Speaker 2:

We have.

Speaker 1:

From fixed rate and adjustable rate mortgages.

Speaker 2:

Yeah.

Speaker 1:

To conventional and government backed loans and jumbo loans, and HEOCs and home equity loans.

Speaker 2:

And reverse mortgages.

Speaker 1:

It's amazing how many options there are.

Speaker 2:

It is. There's a lot to consider.

Speaker 1:

Yeah, it seems like the best choice. Yeah, it really depends on your situation.

Speaker 2:

It does, and your goals your goals and your circumstances.

Speaker 1:

Yeah. So just to recap, we talked about fixed rate loans.

Speaker 2:

Yeah.

Speaker 1:

Which have that stable payment.

Speaker 2:

Stable, predictable payments and then RMs. Where?

Speaker 1:

the rate can adjust, yeah, and then conventional loans.

Speaker 2:

Conventional.

Speaker 1:

Which are common but have stricter rules.

Speaker 2:

Right. Usually need good credit.

Speaker 1:

And government-backed loans.

Speaker 2:

Government-backed loans.

Speaker 1:

Which can be more accessible.

Speaker 2:

Right Lower down payments yeah, lower credit scores and then jumbo loans. For those expensive houses.

Speaker 1:

For really expensive houses.

Speaker 2:

Yeah.

Speaker 1:

And who loaf sees.

Speaker 2:

You loaf sees which are flexible.

Speaker 1:

Yeah, like a credit card for your house.

Speaker 2:

And home equity loans.

Speaker 1:

Home equity loans.

Speaker 2:

Which give you a lump sum.

Speaker 1:

Lump sum up front.

Speaker 2:

And then reverse mortgage For seniors, for seniors.

Speaker 1:

To access their equity.

Speaker 2:

Yeah, so many options.

Speaker 1:

It's a lot to take in.

Speaker 2:

So what's the takeaway for our listener?

Speaker 1:

The takeaway is think about your long-term goals. Okay, don't just think about buying a house today. Right, think about how this loan is going to affect you for years to come.

Speaker 2:

Right.

Speaker 1:

How is it going to shape your financial future and your relationship with your home?

Speaker 2:

So really do your research. Yeah, look into the details of do your research. Yeah, look into the details of each loan type.

Speaker 1:

Yeah.

Speaker 2:

And figure out which one is the best fit for you.

Speaker 1:

That's great advice. Thank you so much for joining us on this deep dive.

Speaker 2:

It was my pleasure.

Speaker 1:

Yeah, it's been really informative.

Speaker 2:

I'm glad.

Speaker 1:

So I encourage all of you listeners out there to think about these things.

Speaker 2:

Think about your goals.

Speaker 1:

Really do your research and find the best loan for you.

Speaker 2:

Absolutely.

Speaker 1:

Thanks for listening to the Deep Dive.

Speaker 2:

Thanks everyone.

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David (Viacheslav) Davidenko

Host