Did you know you have a choice when it comes to mortgages? Many first-time homebuyers don’t realize that there are many kinds of home loans available. In fact, some mortgages put homeownership within reach, especially for those who think they may not otherwise qualify. If you’re eager to buy a North County San Diego home, then be sure to shop around for rates and terms. These are the most common types of home loans that you will encounter when you do.
If you go to your bank to apply for a mortgage, then you will most likely be seeking a conventional loan. These types of mortgages are not guaranteed by the federal government as other loans on this list are. There are two types of conventional mortgages — conforming and non-conforming. If you apply for a conforming loan, then your lender will be following the rules that have been established by Fannie Mae and Freddie Mac, which are federally-backed mortgage companies. For those who need unusually large loans or if you don’t meet the criteria set forth by Fannie Mae and Freddie Mac, then you may apply for a non-conforming loan. Be aware that these often have higher interest rates and you’ll likely need at least 20 percent of the purchase price for a down payment.
If you’re a first-time homebuyer who is worried about having enough money for a down payment, then look into an FHA loan. These loans are backed by the FHA or Federal Housing Authority. You’ll often pay less for your down payment — as low as 3.5 percent. FHA loans are also good options for those with lower credit scores, and they offer competitive interest rates. You’ll need to meet the requirements in order to apply. This includes buying the home as your primary residence and have a steady income and proof of employment.
If you’re a service member, veteran, or military spouse, then you may qualify for a VA loan. These loans are backed by the U.S. Department of Veterans Affairs and are an excellent choice if you don’t have money saved for a down payment. These loans offer a no-money-down option and have competitive interest rates. You must meet the lender’s requirements for income and credit and the home you’re buying must be your primary residence.
Finally, you may also qualify for a USDA loan if you’re purchasing a home in a rural area. These loans are backed by the U.S. Department of Agriculture and like a VA loan require no down payment and have less stringent credit requirements. This loan program seeks to boost rural communities, but be sure to check a home’s eligibility status before applying.
Contact the Clark & Gilman Team today!
Are you ready to make your dream of North County homeownership a reality? Then contact the experts at Clark & Gilman Team at 760-758-1211 or [email protected]sbcglobal.net. Our agents are standing by to answer all your questions and to help you through every step of the real estate process. Contact us today to get started!