Buying a home is a major life milestone, whether it’s your first home, or just another chapter in your life. However, not very many people have the ability to buy a home fully, and therefore home financing is a very large need in the United States. Thankfully there are many options, however the downside is that sometimes the possibilities can feel overwhelming. A mortgage payment isn’t something that is a one-time deal, so making sure that you understand your means enough to make the right financial decisions for your future payments is important.
There are a few different types of loans that any homeowner can choose from, depending on the individual and their needs. Here are three that are the most common.
FHA, or Federal Housing Administration, is a popular choice, especially for first time homeowners. The benefit to FHA home loans is that they have lower interest rates and also are available to those with a lower credit score. According to the U.S. Department of Housing and Urban Development, a credit score of at least 580 is required, and a down payment as low as 3.5%. Sometimes conventional loans can require up to a 20% down payment, therefore, this is a great option for those who are looking for a more affordable mortgage option. It is important to note that FHA does not provide the loans to homeowners, but they help insure lenders in case borrowers do not make the necessary payments.
Conventional loans tend to be the hardest to qualify for, simply because of the many requirements that must be met. They ask for higher down payments, and also require a higher credit score. Also taken into account are factors such as income, which may instantly weed out many individuals due to these harsher rules. However, these are fixed-rate mortgages that are not held responsible for by the government, and they also have loan limits.
VA loans, or U.S. Department of Veterans Affairs, help veterans or service people get a loan without a down payment. These types of loans also have a limit, although they are generally much easier to get than conventional loans are.
At Ace Mortgage Loan Corp., we know that it can be difficult to figure out which loan option is right for you, especially because you’ll want to make sure you’re making the right choice. Luckily we have professional and knowledgeable lenders that can assist any new home owner with the information and direction they may need. If you’re curious about home financing options in Pompano Beach, call our team of specialists today to see how we can most efficiently and affordably get you into your new home.