March 30, 2021

Six Types of Home Loans—Which Is Right for You?

When it comes time to turn the house of your dreams into your family’s home, it’s important to find the right mortgage. We’ve got great news—South Atlantic Bank offers a variety of loan programs to meet your residential mortgage needs


First, let’s start with a few terms you might have heard (or not) as they relate to mortgages. Knowing these will help you decide which mortgage product may be the best fit:

  • Principal: The amount of money you’ve borrowed in a loan.
  • Interest: The amount of money you’re paying in exchange for borrowing money. As you pay your lender back, your payment will include both principal and interest.
  • Taxes: Depending on the type of mortgage program you choose, your estimated property taxes may be included in your loan payment. If that’s the case, they’ll be put into an escrow account and paid by your lender when due.
  • Insurance: Like estimated taxes, your homeowner’s insurance policy and private mortgage insurance (PMI) costs may be included in your mortgage payment as well. That money, paid monthly as part of your overall payment, will also be put into escrow and paid directly to your insurer.
  • PITI: Includes principal, interest, property taxes, and any applicable insurance premiums.
  • PMI: Private mortgage insurance, which is usually required when you have a conventional loan and put down less than 20% of your home’s purchase price.


Now let’s take a closer look at what’s available and find the mortgage product that’s right for you:

Fixed-Rate Mortgages

With a fixed-rate mortgage, offered for 15-, 20-, and 30-year terms, you can lock in a specific interest rate over the life of your loan. Although the interest rate on a fixed-year mortgage may be a little higher than that of an adjustable-rate loan, the key benefit is that you’ll know exactly how much your principal and interest payments will be over the life of your loan, because those numbers are locked down. 

Adjustable-Rate Mortgages

As their name implies, the interest rate on adjustable-rate mortgages can vary during the life of the loan. If you go the adjustable-rate loan route, know that your initial interest rate will lock in (or be fixed) for a designated period of time. Then, it will adjust based upon a predetermined schedule. Adjustable-rate loans are popular with homeowners who want low initial payments, as well as those who may be looking to sell or relocate before rates change.

FHA Loans

Federal Housing Administration (FHA) loans have lower downpayment and credit-score requirements when compared to conventional loan programs. There’s a maximum FHA loan limit for each county, so be sure to contact a South Atlantic Bank mortgage loan officer for specific details. Eligibility rules apply, but we can help you determine if FHA loans are an option for you and your family.

VA Loans

If you’re an eligible servicemember, veteran, or surviving spouse, a VA loan may be right for you. Since the U.S. Department of Veterans Affairs guarantees a portion of each VA loan, lenders can offer more favorable terms as a way to help eligible borrowers buy, build, repair, or refinance their home. For a VA loan, 0% down is required for a primary purchase mortgage. Several key factors—including length of service or service commitment, duty status, and character of service—will determine VA loan eligibility.

USDA Loans

USDA loans, guaranteed by the U.S. Department of agriculture, help provide affordable opportunities to potential homeowners with low-to-moderate incomes and require 0% down payment. The most significant difference in a USDA loan and an FHA loan is that USDA loans are considered rural development loans, and are issued to help stimulate growth in rural and suburban communities across the country. So both you and the property you’re interested in purchasing must meet USDA eligibility guidelines for this type of loan to be a fit.

Jumbo Loans 

Jumbo loans are those that exceed the maximum lending amount put in place by government-sponsored entities (GSEs) like Freddie Mac and Fannie Mae. These GSEs ultimately purchase most single-family-home mortgages in the U.S. but don’t buy, guarantee, or secure loans in excess of $510,400. If you’re looking at a significant purchase, contact us—as your Carolina Coast lending specialist, we’re ready to help.


If you’re ready to take the next step toward homeownership, we encourage you to meet with our experienced team of mortgage experts today. South Atlantic Bank’s local mortgage loan officers live, work, and play along the Carolina Coast and are ready to listen to your needs and help guide you through the mortgage process.

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