A mortgage is a crucial step in buying your home, and selecting the most suitable mortgage depends on many factors. You must choose the best mortgage option that suits your lifestyle and budget. There are so many mortgage options available that if you start researching each, it is bound to take too much of your time and effort. Being one of the leading Massachusetts mortgage companies, we can help you cut short the research part and find the best mortgage option for your home purchase. This blog covers the top four popular mortgage options: USDA Loans, FHA Loans, VA Loans, Conventional Mortgage. Let’s get started!
1) USDA LOANS
The United States Department of Agriculture (USDA) offers a home loan program to help low-to-moderate income families buy and build homes. The USDA home loan program offers lower interest rates and flexible terms to borrowers who meet certain eligibility criteria. If the applicant is less likely to get conventional loans, USDA is a good option for 100% financing.
The two different types of USDA Loans are:
Direct Loans: The USDA provides these loans directly.
Single Housing Family Loans: Although offered by the USDA, these loans are granted by third-party authorities such as banks. Its eligibility also includes a credit score check.
USDA Home Loan Eligibility Criteria
- U.S Citizenship/ U.S Non-citizen National
- Income Criteria (The minimum income requirement for a home loan guarantee varies by location and household size.),
- Credit Score
- Stable Income Sources
Drew Mortgage Associates, approved mortgage lenders in MA can help you learn more about USDA Loans, apply, and get qualified.
2) FHA LOANS
FHA or Federal Housing Administration loans are a type of mortgage insured by the government. FHA loans can be used to purchase a primary residence only. Hence, it is fairly popular among first-time homebuyers in MA. It allows borrowers to get low down payments.
FHA offers a wide range of flexible terms such as fixed rates and adjustable rates. It also offers lower closing costs than other types of mortgages like conventional loans or jumbo mortgages.
FHA Home Loan Eligibility Criteria
- Buyer of Primary Residence
- Credit Score
- Steady Employment
- Mortgage only by FHA approved lender or bank
3) VA LOANS
VA loans are a type of loan that is issued by the U.S. Department of Veterans Affairs. These loans are available to veterans who are honorably discharged from service, the spouses of those who died in service, and active-duty military personnel.
VA loans offer many benefits to borrowers such as zero down payment, flexible interest rates, flexible terms, concession on closing costs, no mortgage insurance, etc.
VA Home Loan Eligibility Criteria
- The U.S. Army active duty military members (at least service period of 90 days)
- Honorably discharged veterans
- National Guards or Reserves Members
- Spouses of veterans (subject to various terms & conditions)
4) CONVENTIONAL LOANS OR FIXED-RATE LOANS
Conventional loans for first-time homebuyers in Massachusetts are offered by banks and mortgage lenders. These loans are most widely available for all borrowers who meet certain criteria. These loans are issued at a fixed rate for a fixed amount of time, typically with a term between 5 and 30 years.
Conventional Home Loan Eligibility Criteria
- Good Credit Score
- Stable Employment
- Good Debt to Income Ratio
There are many reasons why you might want to hire a real estate agent. Buying a home can be expensive, so it’s important to have someone who knows the market and the area where you want to buy. Hiring an agent will also save you time by having them do all of the research work for you, including looking at listings, negotiating with sellers, and inspecting properties before they buy them.
The Bottom Line
We hope this blog about types of mortgage options proved insightful for you. Drew Mortgage Associates is one of the leading mortgage companies in Massachusetts. We can help you qualify for the ideal mortgage based on your requirements and eligibility. Not only that, our consultants are always here to clear your doubts and make your homebuying process hassle-free. Get in touch to discuss your mortgage options with us!