Buying a new home requires a strategic plan of how you are going to finance your purchase, and for most people, taking out a mortgage is going to be part of that plan. The market for home mortgage loans offers you freedom in choosing which loan works best for you, so it is important to understand your options.
Conventional Home Loans
These loans are also known as fixed-rate mortgages because they offer the borrower a set interest rate that will be applied for a 15, 20 or 30-year loan. For conventional home loans, the borrower typically needs to have a good credit score and most often requires a 20% down payment. If you feel like the conventional loan is the best option for you, but you do not have a great credit score, you may consider lenders specialized in low credit financing Loganville GA.
FHA loans are a popular choice for first-time home buyers and those with low to moderate incomes. These loans offer borrowers wtih a good credit score the option for a down payment as low as 3.5%. While an FHA loan offers a downpayment requirement generally lower than most other financing options, FHA lenders do require mortgage insurance, which will add to your monthly payment.
Specialized Financing Options
If you and/or your spouse are active or retired military you may qualify for a VA loan. These loans offer lower interest rates and no downpayment or mortgage insurance requirements, which makes them a great option for those who qualify.
If you are a low-income family wanting to purchase a home in a rural area, you may qualify for a USDA loan. This loan type is one not known to many, but if you are looking to live in an area with a population under 35,000 this no downpayment, the low-interest mortgage is a great option.
No one mortgage loan option is best for all individuals, so it is important to do your research and work with a trusted lender to ensure you get the right loan for you.