Blog: Different Types of Mortgages

Explore the Different Types of Mortgages: Find the Right Loan for Your Needs

March 1, 2025

Whether you’re purchasing your first home, investing in a second property, or looking to finance a new construction project, understanding your mortgage options is crucial to making an informed decision. At Capon Valley Bank, we offer a variety of real estate financing solutions tailored to meet your unique needs. From primary residences to vacation homes and land purchases, our goal is to provide you with the flexibility, competitive rates, and personalized service you deserve. Below, we’ll break down the different types of loans available to help you find the perfect fit for your real estate goals.

Primary Residence Loans

A Primary Residence Loan is a mortgage used to finance the purchase of your main home—the place where you live most of the time. These loans typically have lower interest rates because they’re considered less risky by lenders. You can use a Primary Residence Loan for a variety of property types, including single-family homes, townhomes, and condominiums. Terms can vary based on your financial situation, but we offer flexible repayment options to ensure that homeownership is within your reach.

Secondary Residence Loans

A Secondary Residence Loan is used to finance the purchase of a second home that is not your primary residence. This could be a vacation home, a seasonal retreat, or an investment property. Lenders typically offer these loans with slightly higher interest rates compared to primary residence loans due to the higher risk involved—secondary residences aren’t your primary source of living. However, at Capon Valley Bank, we ensure competitive rates and terms that make purchasing a secondary home an attainable goal. Whether it’s a beach house or a mountain cabin, we have you covered.

Land-Only Loans

Land-Only Loans are designed specifically for people who want to buy vacant land. These loans are ideal if you’re planning to build a house in the future or invest in property for agriculture, recreational purposes, or development. Because the land is not yet developed, these loans can sometimes have higher interest rates compared to loans for homes, but we provide competitive rates and options to help you secure the property you desire. With a Land-Only Loan, you can purchase land for future use, whether you’re looking to build later or simply make a smart investment.

New Construction Loans

If you’re looking to build a brand-new home, a New Construction Loan is the solution for you. These loans are different from traditional mortgages because they are structured in phases. Rather than receiving a lump sum upfront, you’ll get funding in stages—usually as your builder completes each step of the construction process. This helps ensure that funds are available when needed, and the loan will be converted into a traditional mortgage once the home is finished. A New Construction Loan typically covers the cost of labor, materials, permits, and other expenses involved in building a home.

Mobile Home Loans

Mobile Home Loans are tailored for buyers looking to purchase a manufactured or mobile home, often as a more affordable housing option. These loans differ from traditional home loans because they typically cover homes that are movable, rather than those on permanent foundations. There are two main types of Mobile Home Loans: chattel loans (for homes that are not permanently affixed to the land) and traditional mortgages (for mobile homes that are affixed to a piece of land). These loans come with specific requirements, but we work with you to ensure that your mobile home financing needs are met with competitive rates and favorable terms.

Home Improvement Loans

Home Improvement Loans are designed to help homeowners finance the renovation or improvement of their current property. Whether you’re upgrading a kitchen, adding an extension, or making essential repairs, these loans can provide the necessary funding. Unlike traditional home equity loans, Home Improvement Loans are specifically focused on funding the costs of renovations. These loans can be structured as personal loans or as secured loans, depending on the scope of the improvements and your financial situation. By using a Home Improvement Loan, you can increase the value of your home and enhance your living environment without needing to tap into savings or take on large personal debt.

If you’re ready to take the next step, contact us today to discuss which real estate financing solution best fits your goals!