Close-Ended 

Close-ended loans are loans that cannot be borrowed from again, like mortgages, student loans, and car loans. The loan decreases with each payment. If you want more credit, you have to apply for a new loan.

Conforming 

A conforming loan conforms to the guidelines set by Fannie Mae and Freddie Mac. The main guideline is the maximum loan amount. This amount can vary depending on the home’s location—for example, a house in a high-income area can be eligible for a larger loan than one in a general income area. Other qualification guidelines are concerned with the borrower’s debt-to-income ratio, loan-to-value ratio and credit history.

Conventional

Conventional loans are obtained from mortgage lending institutions not backed by an agency of the government such as the U.S. Department of Veterans Affairs or the Federal Housing Administration. Conventional loans can be either conforming or non-conforming.

Non-Conforming

Non-conforming loans do not conform to the qualifications and guidelines set by Fannie Mae and Freddie Mac corporations. If you require a loan larger than a conforming loan, you will be looking at non-conforming loans, such as jumbo loans.

Open-Ended 

Open-ended loans are loans with a fixed-limit line of credit that can be borrowed from again after they have been repaid. A home equity line of credit, or HELOC, is an open-ended loan. 

HELOCs work like this: The lender approves you for a certain amount of credit based on a percentage of your home’s appraised value, minus the balance owed on your mortgage. The sum acts as a credit line you can borrow from, pay back and borrow from again.

Homeowners renovating their home may want to consider this option to fund the project.