Types Of Home Loans Available In The U.S

Posted by ternce adrain on September 9th, 2019

Planning to buy a home this year? Then you must be aware of different types of home loans available for you. But how do you decide which type of mortgage loan should you choose? A mortgage brokers in Mesa, AZ will help you understand each in details. There are many categories out of which we’ll be discussing about the following:

Government loans

During the Great Depression, in 1934, The Federal Housing Administration was created to make getting approved for a home loan easier to insure the loan in the event the borrower defaults on the loan and make mortgage loan less risky. Under this category, there are 4 loans and these are:

FHA Loans

FHA home loans are one of the most popular types of home loans used by many first-time homebuyers. If you have a 500 FICO score you can qualify for an FHA mortgage with a 10% down payment. Borrowers with a 580 or higher FICO score may qualify for an FHA loan with just 3.5% down.Because of the low credit and down payment requirements they are loved by first time home buyers. Another great benefit of FHA home loans is that the down payment can be a gift from a family member or friend.

VA Loans

Only a Veteran qualifies for a VA home loan. These loans offer a zero down payment with facility of 100% financing. VA loans don’t require mortgage insurance.

USDA Loans

The U.S. Department of Agriculture also offer mortgages in rural areas of the country. USDA / RHS loans offer a no down payment mortgage and have low mortgage insurance fees. To check for eligibility criteria look checkout the official website.

FHA 203k Rehab Loans

FHA 203 loans are a type of home renovation loan that funds the purchase of a home and pay for repairs or renovations on the property. FHA loans require the property to be in livable condition, not in need of repairs.

Conforming Home Loans

Conventional Loans

Conventional loans offered by private lenders and are not insured by the Federal Government. Conventional loan requirements are more stringent than Government loans. Real estate investors will need to get a conventional mortgage because Government backed loans are for homeowners who intend to occupy the property as their primary residency.

Conventional 97 Mortgage

A conventional 97 loan is like a regular conventional loan which requires only 3% down payment. You can also speak to your lender to explore more such programs.

There are many types of mortgages available in the market that can leave you baffled. It is important that you consult a mortgage lender to pick the right type.

Author’s bio: the author is a blogger and the article is about types of mortgages.