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WHAT TYPE OF LOAN IS BEST

What is the difference between Conventional, FHA, VA, etc.?

Conventional
Conventional financing offers various fixed rate & ARM loans. A minimum down payment is 3% if a person meets specific guides. Otherwise, the minimum is 5%. Private mortgage insurance (PMI) is required if the down payment or equity position is less than 20%. The PMI is automatically removed when the loan balance reaches either 78% or 80% of the purchase price or appraised value, whichever is lower. These loans can be taken for a primary home, 2nd home or investment property. One - four unit properties can be financed with these loans.

FHA
FHA financing also offers various fixed rate and ARM loans. 3.5% is the minimum down payment. Mortgage insurance is required on an FHA loan, no matter how much down payment or equity a person has. The mortgage insurance remains on the loan for the life of the mortgage. This loan must be used for a primary home only. FHA rates are generally lower than conventional rates. However, after adding the mortgage insurance, they are very close in overall rate. One-four unit properties can be financed with these loans.

VA
VA financing also offers various fixed rate and ARM loans. To obtain a VA loan a person must be a Veteran of the Armed Forces or currently serving. These loans are offered with zero down payment. VA charges a funding fee that is added to the mortgage amount and the fee amount depends on various items. However, this is waived for disabled veterans. Only a primary home can be financed with a VA loan.

USDA
USDA offers 30 year fixed rate loans. 100% financing is available for people who meet the income limits & the property location restrictions. The USDA fee is 1% & is financed into the loan. This is a great loan for people & property that fit the requirements. This loan must be used for a primary home only.

 

 

 

 

 

Denise Wing, Certified Mortgage Lender, CO License #100007843 NMLS #239685
ACADEMY NATIONAL MORTGAGE CORPORATION - NMLSR #191799
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