What Are the Best Home Financing Options?
Home buyers have many home financing options available, each with its own benefits and eligibility requirements. Choosing the right option can save you significantly when it comes to your interest, fees, insurance, and down payment.
Financing Options for Everyone
Loans are available for nearly everyone. Some loans have better terms than others, which vary depending on your creditworthiness, as determined by the underwriter. As long as you shop around you’ll likely find financing available to help you become a homeowner.
Available Home Financing Options
Most financing options are available from private lenders, with some backed by the government while others are not. Here are some of the best available mortgages on the market:
- FHA Loans
- VA Home Loans
- USDA Loans
- Conventional Loans
- Home Equity Loans
- Home Equity Line of Credit
FHA loans are government-backed mortgages for first time home financing with low down payment required.There’s a 10% down payment for credit scores between 500-579, and 3.5% for scores 580+. This type of loan requires mortgage insurance.
VA Home Loans
Available to military members (present and past) and their families. Loan benefits include zero down payment and no mortgage insurance requirement.
A government-insured mortgage for a property in eligible rural communities. These loans offer no down payment and low mortgage insurance fees. Eligibility requirements include a credit score of 640+.
Conventional loans are offered by a private lender and are not government-insured. Most require mortgage insurance and can have a 15- or 30-year term that is either fixed-rate or adjustable-rate (ARM).
Home Equity Loans
Using your home as collateral, this type of second mortgage gives you a lump sum payment for the equity in your home. Repayment typically has a fixed rate interest.
Home Equity Line of Credit
This type of second mortgage again uses your home as collateral. The lender allows you to borrow up to a certain amount (equal to your home equity) as needed with a variable interest rate.
So Which Financing Option Is Right for You?
With so many options available, it can be confusing keeping them all straight and knowing which one will give you the most benefit. A Mortgage Solutions Financial loan officer can help you sort through your options and guide you to a loan that works for you. Let us help you get your dream home today!