Comparing Best Home Loan Options

Since no two home buyers are alike, it’s not easy to determine the best home loan for every single individual purchasing a home. However, we know how daunting it can be to research the different types of home loans and understand which one to apply for. That’s why we’ve compared the most common home loan options available right now.

Conventional Loans

Conventional loans are one of the most popular loan types today. Most conventional loans are also called “conforming loans” because they adhere to the standards set by Freddie Mac and Fannie Mae. For home buyers, this means most lenders across the country will offer these loans to you. To qualify for this loan, you will need to have a credit score of at least 620. The down payments can be as low as 3% and there’s no upfront mortgage insurance fee. The best part is that this loan is available for all types of properties.

FHA Home Loans

 FHA loans are a popular choice for first-time home buyers, thanks to the lenient credit score standards, small down payment requirements, and flexible income guidelines. However, mortgage insurance premiums are required regardless of how much down payment is made. Borrowers can also only apply for the loan if they intend to use the home as their primary residence. Vacation homes and investment properties are not allowed.

VA Loans

Homebuyers who are actively serving in the military or are veterans can qualify for a VA loan that is backed by the U.S. Department of Veterans Affairs. VA loans are the best home loans on the market, given that the rates are comparatively lower than standard loan rates and because borrowers do not have to pay for monthly mortgage insurance. However, minimum service history is required to qualify for this type of loan and your home should be used as a primary residence.

USDA Loans

 The U.S. Department of Agriculture backs home loans for people who want to purchase a home in a suburban or rural area. This program is meant to make homeownership a lot more affordable, by eliminating the need for a down payment. It also offers lower rates to borrowers.