If you find yourself here, then it is likely that you’re looking for a house. Congratulations! Just putting your good foot forward and seeking out some quality information is a great sign of serious intention. And trust us, you’ll need it for the long process of reviewing potential types of mortgage loans in your future.
Of course, we don’t say that to scare you off. In fact, it’s good to start viewing the process as much more of a journey; one that will take patience and tedious care. But with the right support and nudges in the proper direction, you’ll find yourself closing on a deal to your liking in no time!
The key to picking the right mortgage loan for you lies in knowing the fullest extent of each. As such, LeapFrog has taken the time to investigate what makes each loan type unique and favorable. First, we have FHA loans. These loans are geared toward those struggling to find a decent home with lower income.
First time home buyers can also benefit from their categorically minimal upfront costs. Their guidelines for eligibility aren’t as strict, particularly regarding a buyers credit score. This comes from the lender being covered from any losses in a deal, usually due to having private insurance.
Conventional loans are another of the four main types. These are a solid selection for those with both good credit and low debts. As their name implies, these options abide by the industry standard loan guidelines.
The distinction in conventional loans is that they are usually not co-opted by the government. Financial institutions, mortgage agencies, and more are more likely to be at the center of funding here.
You may have heard conventional loans be cited interchangeably with the phrase conforming loans. This isn’t all the way accurate, in that, it’s possible for a loan to be conforming without being conventional. The distinction comes in where conforming loans can be covered by Fannie Mae & Freddie Mac. Conventional on the other hand tends to be out priced for their coverage.
USDA loans are distinguished by their connection to rural areas. Income is the leading factor when determining if one qualifies. The pros of this option include the potential for not needing to put anything down for closing. Keep in mind, though, that this option requires relinquishing some of your equity .
Then there are VA loans. As the name states, these loans are specifically geared towards those with a verifiable military record. Like the previous entry, these loans can mean no money due at closing. This includes the several fees associated with receiving a VA loan.
We’ve only begun to scratch the service when it comes to your options for mortgage loans types. LeapFrog will continue to provide up to date content and tips for finding quality housing. Have more questions for our team? Schedule a brief consultation with us today! We look forward to hearing from you.