Federal Housing Authority (FHA) loans are government backed and are ideal for people with limited income (higher debt to income (DTI) ratio) and challenged credit. Typically used for first-time homebuyers because it allows for a lower down payment at 3.5%. Some benefits of FHA home loans include:
Conventional loans are backed by Fannie Mae and Freddie Mac. Usually for people with good income and excellent credit. It requires a minimum of 5% down payment when buying. The higher the credit, the lower the interest rate and premium for mortgage insurance or PMI.
Veterans Affairs (VA) home loans are a great benefit to military personnel during and after their service. Some benefits of VA are as follows:
The United States Department of Agriculture (USDA) home loan helps borrowers with low or moderate household incomes, low credit scores or a thin credit history. The borrower must meet eligibility requirements based on income, location, property size and other factors. Eligible borrowers can receive the following benefits:
Jumbo home loans are considered non-conforming mortgages. They are for purchases with a loan amount above the limit set by Fannie Mae/Freddie Mac in every State.
The FHA 203K Renovation loan and HomeStyle Renovation (Conventional version) gives eligible homeowners the ability to finance renovation costs and upgrades to make a house the “dream home “they’ve always wanted. This can be done by adding the costs of renovation/upgrade to the initial loan amount to have 1 single mortgage loan. Possible renovations include: interior and exterior renovations, fences, decks, landscaping or in-ground pools.
The advantages of both FHA 203K and Homestyle Renovation loan include:
The most common (and low-risk) type of home loan with predictable monthly payments. Typically a 30, 25, 20, 15 or a 10 Year Term.
Benefits of a Fixed-rate home loan include:
An Adjustable Rate Mortgage (ARM) is ideal for borrowers who plan to move within five years. ARMs take advantage of a low “introductory” interest rate so the loan stays at the same rate typically for 5, 7 or 10 years. Once the introductory period expires, the interest rate changes with the movement of an “index”. Your monthly payment usually increases after expiration of your ARM term.
Advantages of an ARM Loan include: