Are you wondering about the different types of housing loans there are?
Buying a home is an exciting adventure. Whether you are moving to a bigger home, downsizing, or buying a home for the first time, you are likely feeling happy, excited, and looking forward to the future.
However, you might also be feeling a bit intimidating.
Financing a home can be a long and exhausting process, one that comes with seemingly endless complicated forms and confusing financial lingo. You might be wondering how to find the perfect loan, what types of loans there are to choose from, and more.
Fortunately, you can make the process easier by researching the types of loans available to you. If you are wondering what type of loans there are for buying a home, here are several you need to know about.
USDA Loans
USDA loans are offered to those who want to purchase property in rural areas. While there are specific USDA loan requirements, these loans are easy to be approved for and do not require a high credit score or a downpayment.
Conventional Mortgage
Conventional mortgages are one of the most common house loan types. This is a type of loan that is not funded by the government. These loans are ideal for those who don’t have high borrowing costs and can pay at least a 3% downpayment.
Adjustable-Rate Mortgage
An adjustable-rate mortgage is one of the common mortgage types. With these loans, the interest rate is adjustable, meaning it will stay the same amount for approximately 10 years and then adjust yearly to match the current interest rates. These loans are ideal for those with lower credit scores.
Fixed-Rate Mortgage
Another common type of home loan is a fixed-rate mortgage. With these loans, the interest rate is fixed for the life of the loan. These loans are ideal for those who are planning on buying a forever home.
FHA Loan
An FHA loan is one of the common house loans. With these loans, the downpayment can be as little as 3.5%. These loans are ideal for those who are buying a modest home and don’t have a large downpayment.
VA Loan
A VA loan is a common type of loan that only veterans can qualify for. To qualify, you need to have served 90 consecutive days during wartime, 180 during peacetime, or a total of 6 years in the reserve. VA loans do have somewhat strict requirements, you have to purchase a primary residence that is not a fixer-upper.
These Are the Types of Housing Loans You Need To Know About
There are several types of housing loans you can use to purchase a home.
Some of the most common types include USDA loans and conventional mortgages. There are also adjustable-rate, fixed-rate, and FHA loans. Depending on your background, you might be able to apply for a VA loan as well.
These are the types of loans that are available.
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