There are many different types of mortgage loans available to borrowers in today’s market. Which one is right for you depends on many factors, including: the purchase price of the property you wish to buy, the county location of your purchase, how strong your credit report is, whether you’ve served in the armed forces and what finances you have available for your down payment. Some of the types of loans available are:
VA Loan – This is a loan available only to those who have served in the armed forces. Regardless of which branch you served in and when, one of the benefits of having served the military is this government-backed 100% mortgage loan financing benefit to veterans. While you still have to qualify for this loan with good credit and income, it is an excellent NO MONEY DOWN loan available to veterans to purchase a property.
USDA Loan – This type of loan was originally created by the Dept. of Agriculture for farmers. However in recent years, this loan has become available to everyone who qualifies to purchase in a rural designated area such as Lake County. It is 100% financing, NO MONEY DOWN, and is available for low to median income borrowers.
FHA Loan –an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment of 3.5% and you can have less-than-perfect credit.
Conventional Loan – a conventional loan is generally used by individuals who either have the finances available for a sizable down payment or those seeking to purchase rental income properties. While conventional loans used to require a 20% down payment, there are now many conventional loan programs available for as little as 5% down. However with 20% down payment or more, the borrowers gains the benefit of eliminating PMI (private mortgage insurance) ultimately saving them many thousands of dollars over the course of the loan.
Private Mortgage Loan (Hard Money) – a private money loan (or hard money loan) is a mortgage loan offered by a private investor or company to individuals with less than good credit. Sometimes circumstances occur in life causing financial hardship; sometimes resulting in bankruptcy, foreclosure, missed credit card payments are more. For those individuals, there is often still a way to purchase a property and that’s a private mortgage loan. These loans cost more than other mortgages but allow the borrower to be a home owner rather than renter. The interest rates for private loans range from 9%-12% annually, however qualifying is much easier than any other mortgage loan.
If you’d like more information on any of the loan types mentioned here, please feel free to contact us. Our conversation will be completely confidential and no pressure!