Buying a home is an exciting prospect, and knowing the mortgage loan programs available will help you make a decision as to your overall budget. Even when you don't have a big down payment or your credit is not perfect, you can purchase a home if you find the right home mortgage program services. An FHA loan, guaranteed by the Federal Housing Administration, or a VA loan backed by the U.S. Department of Veteran's Affairs may be the solution you need to purchase a home with a lower or no down payment, making homeownership possible. When you are getting ready to look at homes, it's time to start thinking about home mortgage programs.
The FHA Loan
The Federal Housing Administration makes homeownership easier for those with lower credit scores and not enough money to come up with a 20% down payment. For an FHA loan that is protected by the Federal Housing Administration, your credit score must be at least 580. The current down payment percentage is around 3.5% of the total purchase price of your new home. Even if you have obtained an FHA loan in the past, you can qualify for an FHA loan again. You will need to have mortgage insurance to protect the lender if you have an FHA loan until you have 20% equity in your home and you refinance.
USDA Loans In Rural Areas
Another mortgage loan program is the USDA loan. This is guaranteed by the United States Department of Agriculture, and it is available for lower-income individuals looking to purchase a home in an eligible rural area.
VA Loans For Veterans, Active Service Members and Their Families
A loan backed by the United States Department of Veteran's Affairs does not require you to pay a down payment. You will be borrowing from a VA loan lender, and most lenders require a credit score of about 620 for this type of mortgage.
Fannie Mae and Freddie Mac Loans
These two home mortgage loan programs are for people with great credit who don't want to pay 20% of the down payment for a new home. You can get a Fannie Mae or Freddie Mac mortgage loan and pay a 3% down payment for your property.
Talk with your real estate agent as you get ready to look for a new home. You have options when it comes to your mortgage loan, making it possible to own the home of your dreams.