Although the COVID-19 pandemic has impacted all industries, some of them such as retail, transportation, airlines, hotels have been particularly hit hard. Now that the industries are recovering amid the pandemic, the real estate market in the United States is also showing signs of recovery. As this sector is gradually gaining momentum, it's time for homebuyers to start searching for mortgage loans that are right for them so they can make a decision sooner rather than later.

Here are 5 main types of mortgage loans available today for homebuyers: Conventional mortgage, Jumbo mortgage, Govt insured mortgage, Adjustable-rate mortgage, Fixed-rate mortgage.

You'll have to evaluate the pros and cons of each choice against your personal and financial requirement before making an informed decision.

Conventional Mortgage:

The mortgage plan that is not insured by the government, is called Conventional Mortgage. These mortgages are funded by banks, credit unions, or any private lender. You can use these loans to buy your primary or secondary house. The amount you can borrow is calculated by Fannie Mae and Freddie Mac's income and down payment requirements, as well as the Federal Housing Finance Agency's loan cap (FHFA). A higher credit score is often needed for conventional mortgages as compared to other loans. You can obtain this loan with a credit score as low as 620. The higher the credit score, the lower the interest rate you will get.

Other than the credit score requirements, this mortgage requires you to deposit a 20% down payment for the best rates. If you do not pay 20%, you'll almost certainly have to pay private mortgage insurance (PMI) before you reach 20% equity. PMI is a form of insurance that covers the lender in the event that you default on your loan. PMI is a fee that is added to the monthly mortgage payment that ranges from 0.3 to 1.5 percent of the loan amount.

There are two types of conventional mortgages; conforming and nonconforming. A conforming loan is one that falls under the Federal Housing Finance Agency's overall loan limit. Non-conforming mortgage loans are those that do not follow these rules. The most popular type of non-conforming loan is the jumbo loan.

Jumbo Mortgage:

The most popular type of non-conforming loan is the Jumbo loan. A ""jumbo"" mortgage is one that doesn't conform with the Federal Housing Finance Agency's lending limits. If you're buying an expensive house, you'll almost certainly need a jumbo loan to cover the costs. Through this loan, you can borrow money a large amount of money.

Since these larger mortgages are not backed by either of the government-sponsored bodies, lenders view them as riskier than conforming loans (GSEs). The qualification standards are also strict. You can obtain this loan at a credit score of 700 or more. You would have to demand a higher down payment as well, typically in the range of 20 percent to 30 percent. Lenders prefer jumbo loan borrowers to have higher cash balances as well.

Govt Insured Mortgage:

There are a lot of government-insured mortgages available to the homeowners.  Each form of loan is guaranteed by a separate government-sponsored institution, which has its own set of qualifications.

Credit requirements are flexible and you don’t need a large down payment, these loans make homeownership available to a wide variety of low and middle-income buyers, including first-time buyers. Below, we'll go over four various forms of government-backed mortgages: The Federal Housing Administration (FHA loans), the U.S. Department of Agriculture (USDA loans) and the U.S. Department of Veterans Affairs (VA loans).

1. The Federal Housing Administration (FHA loans):

FHA loans are funded by Federal Housing Administration. It’s a good choice for homebuyers because they can take advantage of the low-down payments and credit score requirements.

You need a minimum credit score of 580 to qualify for the lowest down payment of 3.5%. if you have a credit score of less than 500, you can qualify but with the requirement of a 10% down payment. PMI is required for all borrowers with down payments of less than 20%.

2. The U.S. Department of Agriculture (USDA loans):

USDA loans assist low- to moderate-income homeowners in purchasing homes in rural areas. To qualify, you must buy a home in a USDA-eligible region and meet certain income criteria. it might seem like the loan can only buy farmlands but buyers can buy primary residence as well.  For qualifying, there are no minimum credit score requirements, the down payment is almost 0%.

3. The U.S. Department of Veterans Affairs (VA loans):

If you're on active duty or a veteran of the United States Armed Forces or a family member of one, you may be eligible for a VA-backed mortgage. A Certificate of Eligibility, or COE, will be required for anyone applying for a VA loan. There is no requirement for a down payment or PMI in VA loans, the closing expenses are also normally compensated by the seller.

To cover the program's expense to taxpayers, a funding fee of a percentage of the loan amount is paid on VA loans. Most VA loans ask to roll this amount into the loan or paid in full at closing. There is no limit on how much you can borrow, but the VA can has a certain percentage limit above which you will have to make a down payment.

Fixed-Rate Mortgage:

Fixed-rate mortgages have the same interest rate over the life of the loan, meaning that the monthly mortgage payment remains constant. Fixed loans are typically 15 years, 20 years, or 30 years long.

Adjustable-Rate Mortgage:

Unlike the Fixed rate Mortgage, Adjustable-rate mortgages have fluctuating interest rates. For a specific period of time say, 5 to 10 years, the interest rate will remain low but for the rest of the loan life, the interest rate will change, normally once a year, corresponding to the current interest rates. As a result, if interest rates rise, so do your monthly payments; if they fall, you'll pay less on your mortgage.

Consider your financial position carefully before proceeding with any mortgage. Examine your circumstances and requirements, as well as your analysis, to determine which types of mortgage loans are most likely to assist you in achieving your objectives.