5 Types of Mortgage Loans

Buying a home is often a fun new adventure, but navigating mortgage loans can be challenging. Choosing the right mortgage can save you time and money, so it’s important to weigh your options carefully in this crucial step of the homebuying process.

Learn more about the common mortgage loans available to you in this blog from Fidelity Federal. 

Common Mortgage Loan Options

Review the following mortgage loan options to better understand what’s available to you. Finding a local bank like Fidelity Federal to help narrow your choices can be invaluable. 

Our team of experienced loan professionals will take time to learn your budget and timeline. Using a local bank to originate, underwrite and close your loan will help ensure more accessible communication and less stress.

Fixed-Rate Mortgage

A fixed-rate mortgage has the same interest rate throughout the life of the loan, which means your monthly mortgage payments (loan principal and interest) will always stay the same. These types of mortgages are usually offered in 10-year to 30-year terms. A fixed-rate mortgage can be easier to budget, but you can often expect higher interest rates than adjustable-rate loans.

Learn insights from a loan officer on house-hunting >>

Adjustable-Rate Mortgage

An adjustable-rate mortgage is a loan where interest rates vary over time. You’ll frequently get a lower introductory rate for a set amount of time but then experience rate changes for the remainder of your loan. This type of mortgage is harder to budget for as rates are often unpredictable. 

Read more about our two adjustable-rate mortgages at Fidelity Federal >>

First-Time Homebuyer

First-time homebuyer loans will vary depending on the bank, but most will offer a mortgage with a lower down payment or no private mortgage insurance. For example, our first-time homebuyer mortgage at Fidelity Federal features a five percent down payment and no private mortgage insurance. The home must be your primary residence in the state of Ohio.

Get top tips for first-time homebuyers >>


A construction loan is a good option for individuals building a new home. This special type of construction/permanent loan can often be converted to a traditional mortgage once the home is built. You can usually lock in your interest rate and avoid two closings with six-month or one-year construction periods.

Government – FHA and VA Loans

The U.S. government backs both Federal Housing Administration (FHA) and Veterans Affairs (VA) loans. 

  • FHA Loan – An FHA loan is a good option for buyers with a low credit score or who are unable to afford a down payment on a home. Unfortunately, you will have to pay for private mortgage insurance and may not borrow as much as you could with a conventional loan.
  • VA Loan – VA loans are available for eligible members of the U.S. military as well as surviving spouses. Buyers aren’t required to make a down payment, pay mortgage insurance or meet a credit score requirement. You will, however, have to pay a funding fee at your closing. 

Discover the Welcome Home Program for down payment assistance >>

How Can We Help You Finance Your New Home?

Fidelity Federal is ready to help you finance your new home. Our caring team of local lending officers will take time to get to know you and what you’re looking for in a new home. 

We’ll discuss your credit, budget and desired timeline. Then, we can recommend mortgage options that best fit you! And perhaps the best part is you’ll work with one of our Fidelity Federal team members from the beginning to the end of the homebuying process. 

Contact Us