4 Common Types of Mortgages Every First-Time Homebuyer Should Know About
Buying your first home is a big step. While an exciting transition, the number of considerations you have to make throughout the purchasing process can quickly turn overwhelming. As you move through the mortgage selection process, you’ll chrome across a few different types. Below we’re breaking down each option, who they may work best for and what you can expect if you choose to move forward.
Backed by the Federal Housing Administration, FHA loans are an appealing option for first-time homebuyers.
FHA Loan Requirements:
Must be a first-time homebuyer
Debt-to-income ratio of less than 50%
A credit score of atleast 500
Private mortgage insurance if the down payment is less than 10%
Conventional loans tend to have stricter requirements, including a lower debt to income ratio than FHA loans and higher credit score.
Conventional Loan Requirements:
Debt-to-income ratio of 43 percent or less
A credit score of at least 620
A down payment of at least three percent
VA loans are backed by the Department of Veterans Affairs and available only to eligible veterans, spouses of veterans or military members.
VA Loan Requirements:
To be serving in the military, a veteran or a surviving spouse
Backed by the U.S. Department of Agriculture, USDA loans are specifically for low- or moderate- income borrowers looking to purchase land in rural areas.
USDA Loan Requirements:
Debt-to-income ratio of 41 percent
While there is no set minimum, the general credit score threshold is 640
No minimum down payment
If you choose to work with JenLoans, we will find the best loan program for you, and you will receive a loan pre-approval letter that your real estate agent will use to make offers on different properties.
When it comes to buying a home in California or Arizona, Jennifer Lampe is an expert in guiding homebuyers through the process.
Visit our website to book a call today to learn more about which of the mortgage loan program options may work best for you!