Courses / Mortgage Mastery / Module 2
Module 2: Loan Types Decoded
The mortgage market offers numerous loan products, each designed for a different borrower profile. Choosing the wrong loan type can cost you significantly over time.
Government vs. Conventional Loans
Government-backed loans (FHA, VA, USDA) are insured by federal agencies, allowing lenders to offer them with more flexible qualifications. Conventional loans must meet Fannie Mae and Freddie Mac standards. Each type serves different borrower profiles.
The ARM Decision
ARMs make sense when: you plan to sell or refinance within the fixed period, current rates are historically high (you expect rates to fall), or the rate differential is large enough to create meaningful savings during the fixed period.
Key Takeaways from This Module
- Know the exact eligibility requirements for each loan type
- Calculate the long-term cost difference between FHA and conventional
- Understand when to use an ARM vs. fixed-rate mortgage