Which loan option is typically fixed-rate for the life of the loan and not government-insured?

Which loan option is typically fixed-rate for the life of the loan and not government-insured?

• A. FHA loan with fixed-rate
• B. VA loan with fixed-rate
• C. Seller financing with balloon payment
• D. Conventional (fixed-rate)

Answer: (D)

The key idea is that a fixed-rate loan keeps the same interest rate and payment for the entire term. A conventional fixed-rate loan is not insured or guaranteed by the government, so it typically offers a true fixed rate for the life of the loan. Government-insured options like FHA or VA can be fixed-rate too, but they are government-backed, which doesn’t meet the “not government-insured” condition. Seller financing with a balloon payment isn’t fixed for life, since a large lump-sum balloon is due at the end.

The key idea is that a fixed-rate loan keeps the same interest rate and payment for the entire term. A conventional fixed-rate loan is not insured or guaranteed by the government, so it typically offers a true fixed rate for the life of the loan. Government-insured options like FHA or VA can be fixed-rate too, but they are government-backed, which doesn’t meet the “not government-insured” condition. Seller financing with a balloon payment isn’t fixed for life, since a large lump-sum balloon is due at the end.