- Conventional Loans: These are mortgage loans offered by private lenders, and they typically require a higher credit score and a down payment of at least 3% to 20% of the home’s purchase price. Conventional loans often have competitive interest rates and flexible terms.
- FHA Loans: Backed by the Federal Housing Administration (FHA), these loans are designed for borrowers with lower credit scores or smaller down payments. FHA loans typically require a down payment of 3.5% and have more lenient qualification criteria. However, they require mortgage insurance premiums (MIP) for the life of the loan.
- VA Loans: Available to eligible veterans, active-duty service members, and surviving spouses, VA loans are guaranteed by the Department of Veterans Affairs. They often offer favorable terms, such as no down payment requirements or mortgage insurance. VA loans can be an excellent option if you qualify.
- USDA Loans: These loans, offered by the United States Department of Agriculture (USDA), are designed for low- to moderate-income borrowers purchasing homes in eligible rural areas. USDA loans offer competitive interest rates and require no down payment, but they have income limitations and property location restrictions.
- Jumbo Loans: Jumbo loans are used for financing high-priced homes that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. They generally have stricter qualification requirements, higher down payment requirements, and may carry higher interest rates.
It’s important to research and compare the terms, interest rates, and requirements of different loan options. Additionally, consulting with a mortgage professional or loan officer can provide personalized advice based on your specific situation and goals.
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