Welcome back to my blog. This week we’re talking financing! Let’s jump right on in and chat about the most common loans offered.
FHA Loan: An FHA loan is issued by an FHA-approved lender and insured by the Federal Housing Administration. These loans give buyers the option to have a lower down payment and credit score. Your credit score should be in the 500’s or higher and your down payment can range from 3.5% to 10%. The higher your credit score, the lower your down payment may be. Also, with FHA loans, your down payment can come from savings account, a financial gift from a family member or a down-payment assistance program.
Conventional Loan: A conventional loan is not guaranteed or insured by any government agency and requires a higher credit score. To qualify for a conventional loan, your credit score should be in the 600’s or higher and you will need to put between 3% to 20% down. Again, the higher your credit score, the lower your down payment may be.
VA Loan: A VA loan is a loan available to United States Veterans, Service Members and not remarried spouses. VA Loans are issued by qualified lenders and guaranteed by the U.S. Department of Veterans Affairs. This loan allows for 100% financing which means no down payment is required. Credit wise, you should be in the high 500’s or higher.
USDA Loan: A USDA loan is for eligible rural and suburban homebuyers. This loan also allows for 100% financing. USDA loans are issued through the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture. This loan is only eligible for use in designated rural areas. To qualify for a USDA loan, your credit score should be in the high 500’s or higher and you must meet certain income requirements.
Renovation Loan: A renovation loan gives homeowners access to funds that can go towards fixing things around the house. These loans can come in the form of mortgages with built-in fixer-upper funding or personal loans with as low as 3.5% down for primary residence, second homes and/or investment properties. To qualify for a renovation loan, your credit score should be in the high 500’s or higher.
Jumbo Loan: A jumbo loan/jumbo mortgage is a type of financing that exceeds the limits set by the Federal Housing Finance Agency. With as low as 10% down, you can receive a loan up to about $3 million for your primary residence, second homes and/or investment properties. Credit score requirements are in the 600’s or higher for these loans but, some conforming mortgage programs will allow a credit score below that.
Well guys, that concludes this blog. Note, I did not cover every loan there is but, I did try to touch on the most common. I hope this blog was informational and insightful! If you have any further questions about homeownership, financing, etc. contact me anytime.