Mortgage Quick Tip: Understanding Loans
Written By: Mike Laquerre
In today’s real estate market, your credit doesn’t have to be the world’s best in order to secure a mortgage. Many lending institutions will provide a mortgage to applicants with a minimum 620 credit score. It’s always a good idea to get a snapshot of your credit situation before you look for your new dream home. We recommend that you have one of our preferred lenders pull your credit history to see where you stand. If you find yourself beneath a 620, it might be a good idea to discuss with one of our preferred lenders on how to rebuild your credit. They will take you through the step-by-step process so that your score meets the requirement, enabling you to sail through the mortgage process.
The following are the most popular types of residential home loans:
An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment. Typically, the down payment is only 3.5% of the sales price. This type of loan has PMI or private mortgage insurance.
A mortgage made by a private bank to a qualifying veteran that is guaranteed by the U.S. Department of Veterans Affairs. In order to be eligible for a VA loan mortgage, the veteran cannot have been dishonorably discharged and must have served a certain number of years in one of the branches of the American military. This type of loan has no PMI or private mortgage insurance.
A conventional mortgage is a loan that is not guaranteed or insured by any government agency. It is typically fixed in its terms and rate. A borrower is required to pay PMI or private mortgage insurance when at least 20% of a home’s purchase price is not provided as a down payment.
A USDA home loan is a zero down payment mortgage for eligible rural and suburban homebuyers. USDA loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture.
As a part of its Rural Development program, the USDA invested almost $20 billion in 2014 to help nearly 140,000 families buy and improve their homes. The program is designed to “improve the economy and quality of life in rural America.” It offers low interest rates and no down payments, and you may be surprised to find just how accessible it is. Inquire with one of our Community Experts today to find out if you qualify.
Purchasing a new home today is exciting. Let Adams Homes take away any stress you may have when it comes to the home-buying process. Since 1991, Adams Homes has been delivering unparalleled value to homeowners in the southeastern United States, including Florida, Alabama, Mississippi, Georgia, Tennessee, South Carolina, and North Carolina. As one of the largest privately-held home builders in the country, we offer home buyers both the benefit of purchasing from a local owner-operated builder and the benefit of purchasing from a large, established builder.
Checkout these other related article:
“12 Mortgage Do And Do Not’s”
About Adams Homes:
Founded in 1991, Adams Homes is known as the premier home builder and is one of the largest privately-held home building companies in the southeast. Adams Homes has built more than 40,000 new homes since 1991 and builds in seven states including new homes for sale in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee with corporate headquarters in Gulf Breeze, Florida.
Discover all Adams Homes’ communities, model homes and homes for sale on our website, www.AdamsHomes.com. We have new homes for sale perfect for the first-time buyer, move-up home buyer, who desires to upgrade to a more accommodating new home, and the empty nester who desires to downsize to a smaller home.
While you’re at our website, explore our mortgage calculator and obtain financing information.
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