The Top home loans for 2023

Finding the best loan

Finding the best loan for you doesn't have to be a difficult process, especially if you know your score, how much you have to put down and how much you have for closing costs.  FHA, VA, USDA, Conventional? This is sooooo confusing! But here is some information that you may find useful!

 

An FHA is a loan that is backed by the federal government. It affords mortgages for lower credit scores as low as 500 (however down payments will be higher, as much as 10%).  A credit score of 580 can afford you the opportunity of putting as little as 3.5% down. The downside as the borrower is you pay mortgage insurance (an upfront premium of 1.75% of the loan amount and an annual premium of between .45

% to 1.05% annually, which protects the lender on default. Terms on the FHA loan can be 15 or 30 years at a fixed rate. This loan is best if you can't qualify for a conventional loan due to credit OR if you don't have a lot of cash saved to put down on the home.

 

A VA Loan is a loan made to veterans of the military who can acquire a certificate of eligibility, which can be acquired online at VA.gov or through your chosen lender. The VA loan is made by private lenders that are partially backed by the Department of Veterans Affairs. The VA loan allows for 100% financing of the loan amount and is more flexible with its more lenient credit and income restrictions. Having your Realtor understand the VA process is critical to getting you the best possible outcome for the VA loan. You could potentially get into a home with ZERO out of pocket, to include closing costs!

 

 The USDA loan is a 100% no money down mortgage made available that is backed through the US Department

of Agriculture. It is geographically restricted as it offers loans in more rural areas. The loan is only offered as a fixed rate product. Although the USDA loan does require an upfront mortgage insurance premium

 

 

Conventional is a mortgage loan for scores starting at 620 with down payments as low as 3%. Primary Mortgage Insurance (PMI) can be 

.05% to 1% of the loan amount per year. Terms on the Conventional  loan can be 10, 15, 20 or 30 years at either a variable or a fixed rate. If you have cash on hand for down payment and closing costs than the conventional mortgage could be the best loan for you.  Lenders of conventional loans are not as restricted as government backed loans, although the government has special rules for over site, lenders can set their own guidelines.