4 Types of Mortgages For Homebuyers
One of the first steps to homeownership is to look at options for financing. Most homebuyers will need a mortgage to purchase a home (unless they are paying the full cost of the home cash).
A mortgage loan is a type of loan used to purchase a home. Your repay this loan, along with interest, over a set number of years (typically 15 or 30 years).
You’ll need to work with a mortgage lender to figure out the loan(s) you can qualify for and which would be best for you and your financial situation. To feel a little more prepared for that conversation, let's talk about four of the most common mortgages:
1. FHA Loans
Great for first time homebuyers
Low down payment and closing costs
Easy to qualify for
Credit requirement: 580+ or 500 with 10% down
Down payment: 3.5% or 10% with 500 credit score
2. VA Loans
For service members, veterans, and select military spouses
No mortgage insurance and low closing costs
Government guarantee
Credit requirement: 580+
Down payment: 0% down
3. USDA Loans
Great for low-to-medium income households
Has certain income and area requirements
Lower PMI than FHA Loans
Credit requirement: 640+
Down payment: 0% down
4. Conventional Loans
Great for buyers with good credit, a steady income, and low debt More flexibility and fixed rate
Diverse options for down payment
Credit requirement: 620+
Down payment: 5% down
Looking to purchase a home in 2022? We’d love to answer any questions might you have and connect you with our preferred lender to get the process started. Send us a message and let’s chat!
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