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Choosing a mortgage loan: 3 popular options

Getting the right mortgage makes a world of difference when you purchase a property. You need to know about the different options you have before you decide on the right mortgage for you, though.

Like buying a home, picking the right mortgage is a process. It's likely the largest debt you will have in your life, and it may take you many years to repay. Depending on the mortgage you choose, you could pay a few thousand to many thousands in interest on that loan.

The sad reality is that many people choose the first mortgage they're approved for without understanding what that could mean for them. Getting the right mortgage means better security; if you choose the wrong mortgage, it could cost you too much each month or create financial trouble in the future.

So, how do you shop for a mortgage loan? You begin with conventional loans and then move on to other options. Conventional mortgage loans aren't guaranteed by the government, so you can get them from any private lenders. These are best if you have great credit. If you plan to borrow more than 80 percent of the cost of the home, prepare to get private mortgage insurance, too.

Other options include jumbo loans, which help you borrow more than a typical mortgage allows for, or FHA loans, used by private lenders and guaranteed by the Federal Housing Administration. This loan is available to people with less-than-stellar credit and has a low minimum down payment.

Getting the right mortgage matters. Our site has more on what you should expect when you're choosing a mortgage and how to protect yourself.

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