You’ve decided it’s time to plant some roots and buy a home. Congratulations! The key to a smooth home buying process is to be prepared and that’s where Trinity Oaks Mortgage is happy to help. Once you’ve done a little research, decided on a budget for your monthly payments and down payment amount, and reviewed your credit, you’ll have a better idea of which type of loan will best suit your needs.<\/p>\n
There are many different types of mortgage loans, but the most common are government-insured mortgages like FHA, VA, and USDA and those that are not insured by federal agencies such as Conventional and Jumbo loans. Below we will give an overview of these popular options and list a few pros and cons of each loan type to help you identify which type of loan is right best suits you based on your financial situation. As always, it’s best to consult with a mortgage loan officer<\/a><\/strong> who will help you choose the mortgage loan that is right for you!<\/p>\n There are 3 government agencies that back mortgage loans: the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA), and the U.S. Department of Veteran Affairs (VA).<\/p>\n FHA loans\u00a0<\/strong>help make homeownership possible for borrowers who don\u2019t have a large down payment saved up and may not have a strong credit score. You’ll need a minimum FICO score of 580 if you wish to take advantage of the minimum 3.5% down payment, but you can get by with a credit score of 500 if you put down at least 10%. Private Mortgage Insurance (PMI) is required for loans with less than a 20% down payment. FHA loans can be a great option for first-time homebuyers who may not have a large down payment but are ready to move from renting to owning and begin building equity in their homes.<\/p>\n VA loans\u00a0<\/strong>are designed to provide flexible, low-interest mortgages for members of the U.S. military (active duty and veterans). A VA loan is a mortgage that is made by private lenders but partially backed by the Department of Veterans Affairs. While there aren’t limits on how much you can borrow, there are limits on how much the VA will guarantee. For those who meet the eligibility requirements, VA loans can be the key to becoming a homeowner.\u00a0\u00a0These loans do not require a down payment or PMI and can only be used to finance a primary residence.<\/p>\n USDA loans <\/strong>help moderate to low-income borrowers purchase a home in a USDA-eligible area. You must meet certain income limits to qualify. Some USDA loans do not require a down payment for eligible borrowers with low income but keep in mind that a down payment upfront can help lower your monthly mortgage payments saving you money in the long run.<\/p>\n Opposite of government-insured loans, a Conventional loan is not backed by the federal government. Conventional loans are ideal for borrowers with strong credit, a stable income and employment history, and a down payment of at least 3 percent. There are two categories of Conventional loans known as conforming and non-conforming. Simply put, a conforming loan falls within the maximum loan limits set by the Federal Housing Finance Agency and a non-conforming loan does not. Learn more about conforming loan limits here<\/a>.<\/p>\n Since Jumbo loans are non-conforming this means the home’s purchase price exceeds federal loan limits. The loan limit for a single-family home in 2018 was $435,100 in most parts of the U.S. Jumbo loans are more common in areas where home prices are higher and these types of loans make sense for more affluent buyers purchasing a home in this type of area. Borrowers should have good to excellent credit, high incomes, and a substantial down payment.<\/p>\n Trinity Oaks Mortgage, one of the area\u2019s leading mortgage lenders has vast experience in dealing with many different loan types in Texas. We\u2019re available to answer any questions, help determine if you are eligible, and guide you through the home loan process.<\/p>\n If you or someone you know is interested in securing home financing, let\u2019s talk! Submit the below form and we will connect you with one of our expert Loan Advisors near you.<\/p>\nGovernment Insured Mortgages<\/h3>\n
Pros of Government Insured Mortgages<\/h5>\n
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Cons of Government Insured Mortgages<\/h5>\n
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Conventional Mortgages<\/h4>\n
Pros of Conventional Mortgages<\/h5>\n
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Cons of Conventional Mortgages<\/h5>\n
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Jumbo Mortgages<\/h4>\n
Pros of Jumbo Mortgages<\/h5>\n
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Cons of Jumbo Mortgages<\/h5>\n
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