What type of mortgage do you need?

Dated: July 29 2021

Views: 70

First-time homebuyers can walk into a mortgage brokerage office or visit an online lender without knowing what kind of mortgage they need. But it’s always better to have an idea of what you’re shopping for, especially since you can’t control other factors such as home prices and current rates.

Mortgage loan types include:

  • Conventional Borrowing: Shoppers with higher credit scores and higher down payments can get a conventional mortgage with either a fixed or adjustable rate. Mortgage interest rates can be low for qualified buyers.
  • Subsidized Borrowing: The Federal Housing Administration and the U.S. Department of Agriculture help first-time homebuyers and shoppers in low-income areas buy homes by subsidizing their mortgage loans. FHA and USDA loans allow shoppers with lower credit profiles (a FICO score of 580) to still get affordable home financing. Subsidized loan restrictions include borrowing maximums and safe housing inspections. These loans are for single-family homes in most cases.
  • Veterans Affairs Loans: Veterans and active-duty service members can buy homes with no down payment and no PMI through the Department of Veterans Affairs’ lending program. Banks make loans that are guaranteed by the VA. VA loans require a funding fee that could range from 1.4% to 3.64% for first-time homebuyers.
  • Jumbo Loans: Homes in high-value housing markets like San Francisco and New York City may not fit within a conventional or FHA loan. Jumbo loans can help because they exceed the conforming loan limits of Fannie Mae and Freddie Mac.
Blog author image

Edson de Freitas Jr

Edson A. de Freitas Jr. is a real estate agent working with buyers, sellers, and investors to ensure that they receive a transaction’s best value. Whether you are buying or selling, he understands t....

Latest Blog Posts

What type of mortgage do you need?

First-time homebuyers can walk into a mortgage brokerage office or visit an online lender without knowing what kind of mortgage they need. But it’s always better to have an idea of what you

Read More

Should you buy mortgage points?

Should you buy mortgage points?Many lenders sell mortgage points (also known as discount points). Buying points means you’d pay more up front to lower your mortgage rate which could

Read More

Mortgage Rate Trends

Are mortgage rates impacting home sales?The number of mortgage applications was up 5.7% for the week ending July 23, according to data from the Mortgage Bankers Association. The increase was

Read More

Current Mortgage Rates Move Higher

The average rate for a 30-year fixed-rate mortgage increased to 2.80% this week, ending a month-long slide.This week’s rate is just 0.02 percentage points higher than last week, according to

Read More