There are many factors that determine what type of loan that you should apply for, including the value of your home, the down payment, as well as, your credit score. There are many different types of loans offered, however, the most popular are the conventional loans, and two government loans, including the FHA loans or the VA loans.

Conventional Loans

1. Fannie Mae: This is the common name for the Federal National Mortgage Association. Fannie Mae buys mortgages from lenders and resells them as securities on the secondary mortgage market. Loans that are approved by Fannie Mae, generally qualify for better rates. Before approving you for the loan Fannie Mae must take into consideration a number of things including your credit ratings, debt ratio, and employment history.

2. Freddie Mac: Freddie Mac is the common name for Federal Home Loan Mortgage Corporation. Freddie Mac does not issue mortgages directly, rather, they buy mortgages from lenders and sell them as securities on the secondary mortgage market. As with the Fannie Mae loan, Freddie Mac looks at a number of factors including credit ratings, debt ratio, and employment history, also loans approved through Freddie Mac should qualify for a better rate.

FHA Loans

FHA loan is the first of two types of government loans. A FHA (Federal Housing Administration) loan is insured by the government and has some advantages over a conventional loan, such as more lenient qualification requirements, lower down payments and they are assumable loans. Government loans make up to 20% of residential mortgages in the United States.

VA Loans

Va Loan is the second type of government loan.  In order to qualify for this loan you must be a qualifying vetern,

the unmarried widow of a vetern, a Public Health Service Officer, or an active duty serviceman. The maximum loan amount for a VA-guaranteed loan is $240,000 unless you make a large downpayment. No downpayment, however, is required for most VA loans under $240,000.