What other types of home loans are there?

FHA Loan

A FHA loan is a mortgage that’s insured by the US government’s Federal Housing Administration (FHA). They are popular among first time home buyers because they allow down payments of 3.5% for credit scores of 580+. If your credit score is lower between 500 – 579 you can still receive an FHA loan if you have a 10% down payment. The lower the credit score, the higher the interest you will receive. Remember, just like conventional home loans that do not have 20% down payments you must pay mortgage insurance premiums (PMI). Check with your local lender because anything with the government requirements can change.

VA Loan

If you have served in the United States military the government agency Veterans Affairs (VA) offers an excellent alternative to the conventional loan. These loans can offer 0% down payments without any PMI insurance. The home does have to meet minimum property requirements (no fixer-uppers) and you will need to have certain military experience to qualify. The home must be your primary residence as well. Sorry, no vacation beach houses. Thank you for your service all military men and women and your families for making the United States the greatest country in the world!

USDA Loan

The United States Department of Agriculture (USDA), yes the same department that approves your meat, will loan you money for a home! This program also offers 0% down but you will pay a PMI. These types of loans are primarily used for home buyers looking to purchase in rural areas.

203K Loans

A 203K Loan is a way to bundle in the purchase of your home and the costs of any rehab (fixes) into a single mortgage. So if you find a fixer-upper and want to purchase the home and fix the roof and some other items that need to be addressed a 203k loan can be a great way to do it. There are multiple guidelines that need to be met such as using licensed contractors to complete the work, having inspections of completed work by loan officers and other government legal stuff.