There are many different types of loans on the market and many different types of mortgage programs to choose from.

QUESTION: I want to start looking for a home this spring, but I am really confused about how to start shopping for a mortgage. I’ve heard about so many different types of mortgages. Can you give me a few basic steps about how to get started?

ANSWER: You are right: There are many different types of loans on the market and many different types of mortgage programs to choose from. You should get in touch with at least three different lenders to compare what each offers. Basically, there are three main loan programs: Conventional, FHA and VA.

Conventional: This type of loan is generally available from a bank, mortgage broker or credit union. Within the category of conventional loans, there are various options, such as a fixed rate mortgage (usually 30-year or 15-year) and adjustable rate mortgages (ARM). A fixed rate mortgage is just that – the rate is fixed for the mortgage term.

With an ARM, the interest rate will adjust depending on the loan. Generally, the shorter the period of adjustment, such as a 1-year ARM, the lower the initial interest rate. But when the adjustment period ends, the interest rate will adjust up or down. In a time of rising interest rates such as we have now, you can be certain the ARM will adjust up.

All lenders you contact should have a written document detailing each of their conventional mortgage programs, how they work and what they require for you to qualify (down payment, credit score, income, etc.) Read the information carefully, ask questions and be sure you understand the information.

Federal Housing Administration (FHA): This loan is guaranteed by the FHA and available to first-time home buyers with lower down payments and credit scores than those needed for a conventional mortgage. However, borrowers must pay for this guaranty by paying private mortgage insurance for the life of the loan. There are other qualifications borrowers must meet as well in order to obtain an FHA mortgage. Ask your lender what these requirements are, if you qualify and how much private mortgage insurance will add to the cost of the loan and your monthly mortgage payment.

Veterans Administration (VA): These are very advantageous loans, but are available only to military veterans. If you or your spouse is a veteran, ask your lender for details about a VA home mortgage.

Once you have narrowed down the type of loan program – conventional, FHA, VA – and the lender you want to go with, the next step is to get preapproved (not prequalified) by the lender. In a preapproval, the lender will pull your credit score, verify income, down payment, tax returns, bank statements, etc. and pre-approve you for a loan amount. Now you are ready to begin shopping for homes in your price range!

Linda Goodspeed is a longtime real estate writer and author of “In and Out of Darkness.” Email her at lrgoodspeed@comcast.net.