When looking at all the different types of home loans, the choices can be overwhelming. To help make sense of these options, we have narrowed down the 4 major home loan types: FHA, Conventional, USDA, and VA. They each have their own benefits and drawbacks, and are designed for specific circumstances. Take a look at the basic information for each, and talk to your mortgage broker for more information.[divider]
4 Major Types of Home Loans:
1 – FHA loan
- Minimum 620 credit score
- Low rates
- Good for any location
- Mortgage insurance is required for the life of the loan
- Minimum 3.5% down payment
2 – Conventional Loan
- Minimum 660 credit score
- Higher rates (negated by lower mortgage insurance costs)
- Lower mortgage insurance costs
- Good for any location
- Minimum 5% down
- Can close in as little as 2 weeks if needed as long as everything is very organized!
3 – USDA Loan
- Minimum 620 credit score
- Low rates and relatively low mortgage insurance
- Location Specific (Rural Development Loan)
- Subject to income limits (per county)
- Minimum 0% down
- Typically takes 45-60 days to close
- Can’t own another home and have a USDA loan. A USDA loan is considered a “only home” loan.
- Visit the USDA website to check for USDA Property Eligibility
4 – VA Loan
- Minimum 620 credit score
- Very low rates
- Funding fee of 2.15%
- Minimum 0% down
- For past or present military personnel
- Typically takes 45-60 days to close
