Are you in the market for a new home? Do you know which home loan is right for you?
If you need a mortgage to make your homeownership dreams come true, here’s some useful information on the different types of home loans that might be options during the buying process.
Conventional Home Loan
A conventional home loan is a loan that is not backed by any government agency. These loans are best for buyers with both strong credit as well as cash for a sizable down payment. To qualify, you’ll need a credit score at least in the mid-600s, but you’ll want something in the mid-700s to receive the best rates.
Conventional loans favor buyers who want property ownership options without restriction, or those who look for more control over their mortgage insurance. There aren’t any program-specific fees for conventional loans, and you’ll have more freedom of choice in the structure of your loan options.
If you’re looking for a new home or property and want a group of people you can trust, let Achieva guide you through the mortgage process with expert advice, competitive mortgage rates, and local loan servicing.
Federal Housing Administration Loan (FHA)
A Federal Housing Administration Loan (FHA) is insured by the federal government. That insurance allows lenders to offer lower down payments and closing costs. The program offers assistance to first-time homebuyers, seniors, and those buying a manufactured or mobile home.
To qualify for a FHA Loan, you’ll need:
- A credit score (which doesn’t need to be as high as the one for a conventional loan)
- A home that’s within the FHA limits, which are determined by location
- An application process with an FHA-approved lender
An FHA loan is a great option to consider for your home-buying process, especially if you’ve been budgeting your finances and/or using your high-yield savings account and other saving strategies to maximize your cash flow.
Veteran Affairs Home Loan (VA)
A Veteran Affairs (VA) Home Loan is a mortgage loan designated specifically for service members and eligible surviving spouses. This type of loan not only comes with home loan guaranty benefits, but also includes other programs for buying, building, and repairing your home.
The main benefits of a VA Loan are:
- No required down payment
- Limited closing costs
- No private mortgage insurance
VA loan applicants can find additional information from the federal government’s VA Home Loan Buyers Guide, which covers how to become eligible, documents you’ll need (for both the lender and the VA), and even lists items you can negotiate throughout the process!
If you fit the criteria, you can apply for a VA loan with Achieva Credit Union as your lender. We’re fully equipped with knowledgeable advisors who can help navigate this process and get you into your dream home.
Portfolio Home Lending Loan
Portfolio home loans are usually for atypical homebuyers, such as real estate investors. The key difference in portfolio loans is that lenders originate and retain the portfolio themselves. They can be used to buy a home or investment property and allow you to spread the cost of the home over time.
The loans do come with potentially higher interest rates, and lenders will protect themselves by requiring larger down payments from those applying for one.
Achieva is equipped to help you secure the home of your dreams, no matter the loan type. Whatever your buying scenario, we’ve got you covered. Call Achieva today at 866.617.6373 to discuss your options with one of our mortgage experts.
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Resources:
USA Gov: Government-backed home loans and mortgage assistance
VA Gov: VA Home Loans | VA Home Loan Guaranty Buyer’s Guide
