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What Loan Type is Best For You?


Here is a very brief overview of loans available in the marketplace:

 Conventional Loans

These are non-government backed loans with as little down as 3-5%and these loans can be with private mortgage insurance or no private mortgage insurance. The minimum credit scores on these types of loans are 620.

FHA Loans

A FHA loan is a loan insured by the Federal Housing Administration (FHA). If you default on the loan, the FHA will repay the bank’s loss.

Since the loan is insured, the lender can offer you good terms including:

  •  a low down payment (as low as 3.5% of the purchase price)
  • the financing of some closing costs (which means they are included in the loan amount), and
  • Minimum credit score here is 580 typically

VA Loans

A VA loan is a loan guaranteed by the Veterans Administration (VA). This type of loan is only available to certain borrowers through VA-approved lenders. (The guarantee means that the lender is protected against loss if the borrower fails to repay the loan.)

To get a VA loan, you must be:

  • a current member of the U.S. armed forces, can have 180 days of active service with 2 years’ service, (exceptions and honorable discharges can apply)
  • a veteran
  • a reservist/national guard member (6 years or 90 plus days active duty or title 10 time)
  • an eligible surviving spouse (if a surviving spouse is receive DIC (Dependent and Indemnity Compensation) you can usually be eligible for this program
  • minimum credit score here is 580 typically

USDA Loans

  • USDA Loans are loans available to consumers in Rural Areas
  • these Loans are 0 down
  • they are subject to property and county maximum income restrictions
  •  minim credit scores typically 580