Different Types of Home Loans: FHA, Conventional, USDA, & VA

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Home Buyer Financing: Different Types of Home Loans

When looking at all the different types of home loans, the choices can be overwhelming. To help make sense of these options, we have narrowed down the 4 major home loan types: FHA, Conventional, USDA, and VA. They each have their own benefits and drawbacks, and are designed for specific circumstances. Take a look at the basic information for each, and talk to your mortgage broker for more information.[divider]

4 Major Types of Home Loans:


 

1 – FHA loan

  • Minimum 620 credit score
  • Low rates
  • Good for any location
  • Mortgage insurance is required for the life of the loan
  • Minimum 3.5% down payment

 2 – Conventional Loan

  • Minimum 660 credit score
  • Higher rates (negated by lower mortgage insurance costs)
  • Lower mortgage insurance costs
  • Good for any location
  • Minimum 5% down
  • Can close in as little as 2 weeks if needed as long as everything is very organized!

3 – USDA Loan

  • Minimum 620 credit score
  • Low rates and relatively low mortgage insurance
  • Location Specific (Rural Development Loan)
  • Subject to income limits (per county)
  • Minimum 0% down
  • Typically takes 45-60 days to close
  • Can’t own another home and have a USDA loan. A USDA loan is considered a “only home” loan.
  • Visit the USDA website to check for USDA Property Eligibility

4 – VA Loan

  • Minimum 620 credit score
  • Very low rates
  • Funding fee of 2.15%
  • Minimum 0% down
  • For past or present military personnel
  • Typically takes 45-60 days to close

 

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