Which Home Loan Is Right For You?

There are many different types of loans out there. Many factors play a part on which type of loan is best for you and your home. Below is information on the most popular mortgage options in the U.S.

Conventional

• This is the most common mortgage option and usually has the best interest rates.

• You can buy any home in any condition

• Low rates for borrowers with excellent credit.

• Debt To Income ratio: 43%

• You can use a conventional loan to buy a primary residence, second home, or rental property

• Conventional loans are available in fixed rates, adjustable rates (ARMs), and offer many loan terms usually from 10 to 30 years.

• Down payments as low as 3% depending on credit score. Usually they require 10% down.

• No monthly mortgage insurance with a down payment of at least 20%.

• Mortgage insurance is cancelable when home equity reaches 20%.

• Best suited for those with a credit score of 680 and above.

VA

• Only available to veterans:

VA Loan Eligibility Guidelines

You may be eligible for a VA home loan if you meet one or more of the following conditions:

You have served 90 consecutive days of service during war time

Or

You have served 181 days of service during peacetime

Or

You have more than 6 years of service in the National Guard or Reserves

Or

You are the spouse of a service member who died in the line of duty or as a result of a service-related disability

• 0% down

• Single-family homes are the standard when pertaining to the VA Loan; however, many other types of housing can also win VA Loan approval, including condominiums, townhomes, modular homes, new construction and manufactured homes.

• Debt To Income ratio: 41%

• Specific VA Home Requirements:

• No termite or pest damage

• Working plumbing, water and sewage disposal

• Functional heating and cooling units

• Operational, and up to date, electrical systems

• Structural soundness

FHA

• This offers less of a down payment and has easier credit requirements

• 3.5% minimum down payment with a FICO credit Score of 580/ 10% minimum down payment with a FICO credit score below 580

• Debt to Income ratio: 46.9%

• Specific FHA Home Requirements:

• No termite or pest damage

• Working plumbing, water and sewage disposal

• Functional heating and cooling units

• Operational, and up to date, electrical systems

• Structural soundness

USDA

• This option was made to promote the purchase of rural land.

• 0% down payment

• Most lenders don't even list the USDA loan on their menu.

• Debt To Income ratio: 41%,

• 660 FICO credit score

• Must have stable employment, or can show a demonstrated ability to save.

• 30-year fixed rate mortgage or a 15-year fixed-rate mortgage only.

• Specific USDA Home Requirements:

• No termite or pest damage

• Working plumbing, water and sewage disposal

• Functional heating and cooling units

• Operational, and up to date, electrical systems

• Structural soundness

Your Concern Is My Priority