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Loan Types and Terms

Ever hear of FHA? How about conventional? What about escrow? Mortgages have a language all their own, and it can be rather overwhelming, especially if you’re new to the home buying process. Let’s define some key terms and clear up misconceptions that many individuals have about purchasing a home!

FAQs and terms.

Process.

Loan types.

Conventional loan details:

  • Down payment as low as 3% with HomePossible®.
  • Loan terms from 10-30 years.
  • Fixed and adjustable rates available.

FHA loan details:

  • Mortgage insured by the Federal Housing Administration (FHA).
  • Only 3.5% down required.
  • Loan terms from 10-30 years.
  • Fixed and adjustable rates available.
  • Credit scores down to 580 accepted, co-applicants allowed.
  • Seller can pay up to 6% of the sale price towards closing costs.
  • FHA 203(k) available to rehab homes.
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VA loan details:

  • A mortgage for military members and Veterans, guaranteed by the Department of Veteran Affairs (VA).
  • No down payment or mortgage insurance for qualifying military veterans.
  • Credit scores down to 580 accepted.
  • Seller can pay up to 4% of the sale price toward closing costs (total concessions may exceed 4% depending on type).
  • Limited closing costs, no early payoff penalty, funding fee waived for disabled veterans (>1%).
  • Benefits can be reused for future VA loans.

USDA loan details:

  • A mortgage for homes in rural areas, small towns, and some suburbs, insured by the Department of Agriculture (USDA).
  • No down payment required, closing costs can be financed into the loan amount.
  • 30-year fixed-rate mortgage with no max loan amount (based on ability to qualify).
  • Up to 6% seller concessions allowed.
  • Single-family homes, townhomes, and manufactured homes eligible.
  • Lower credit scores accepted (must meet property eligibility and income requirements).

We know this is a lot of information. That’s why we’re here to help! If you have any questions or are seeking further clarification regarding any of these terms, please reach out.