Other Mortgage

A two step mortgage is essentially a 30 year mortgage with special features: Convertible or non-convertible. These mortgage loans are also known as 5/25s and 7/23s. The 5/25s has a fixed interest rate for the first five years and then switches to either a 25 year fixed mortgage rate or a 1 year adjustable mortgage rate. The 7/23 has a fixed interest rate for the first seven years and then converts to a 23 year fixed or a 1 year adjustable. The starting home loan rate is lower than a 30-year fixed. However, it is higher than a 1-year ARM mortgage. This type of residential mortgage is less risky than a mortgage ARM initially since the adjustment interval is longer.

A FHA mortgage is a residential loan insured by the FHA that is part of the U.S. Department of Housing and Urban Development (HUD). FHA loans have lower mortgage down payment requirements and were easier to qualify for than conventional loans. The goal of the FHA is to make housing affordable and stimulate demand. 

The best feature of an FHA loan is the low downpayment. The down payment mortgage can be as low as 2% but you will be required to pay pmi private mortgage insurance. FHA loans are also assumable so you can take over from the property seller if you qualify. This could save you significant amounts of money and hassles. The FHA mortgage loan amounts are determined by the median prices of different cities within a specific region.

The U.S. Department of Veterans Affairs guarantees mortgage loans for veterans and service persons. It does not underwrite the residential loans. The guaranty allows veterans to get home mortgage loans with good borrowing terms, usually with little or no down payment.  To be eligible for the VA loan, you must have served 180 active days service since September 1940. If you enlisted after September 7, 1980 you need to have two years of service. You do need to get a certificate of eligibility from the Department of Veterans affairs as proof of service.
  Veterans are not permitted to pay points to the mortgage lender on these types of mortgage loans. You can prepay a VA loan without penalty and the residential loan is assumable, meaning the property buyer can take over the mortgage if the property is sold. This feature can save a buyer significant amounts of money in mortgage interest payments. The buyer still needs to meet the requirements of the current mortgage banker. The homebuyer takes over payment on the existing mortgage and pays the difference between the mortgage balance and the selling price. You should always verify first whether the mortgage home loan you are securing is assumable.