Mortgages come in many shapes and sizes, meaning that there is one that right for you.
A mortgage is something that is going to be with you for a significant portion of your life–30 years, on average. With the many mortgages that exist in the world, it’s important that you choose the one that will work best for you, instead of having one that will put you into a financial catastrophe! Here are the three kinds of home loans that you should be aware of before you go mortgage shopping.
Types of Loans
- Conventional Loans
Conventional mortgages are ideal for the hopeful homeowner with good or excellent credit. They’re relatively standard and follow conservative guidelines for credit scores, minimum down payments, and your debt-to-income ratio (the percentage of monthly income that is spent paying all debts).
- VA Loans
VA Loans are for active-duty military and veterans that qualify for Veterans Affairs mortgages. Spouses of a military member who sacrificed their life for our freedom on active duty or as a result of a service-connected disability may also qualify. No down payment is required with this kind of mortgage. The VA does not lend money but guarantees loans made by private lenders.
- FHA Loans
Federal Housing Administration mortgages were created for people whose house payment will be a big chunk of their “take home” pay, hopeful homeowners with low credit scores, and homebuyers with little down payments to offer. FHA loans allow the borrowers to spend up to 56 to 57 percent of their monthly income on monthly debt obligations.
It’s important to know about mortgage types, as it will be with you, potentially, for the next thirty years! Contact Dean Rathbun when it comes time to determining the perfect plan of action to buy your home. We are happy to help you.