Common Loans – Understanding the Basics
With all of the different loans available today, it can be overwhelming to try to understand exactly what is available. Even worse, how do you choose what type of loan is right for you? Though every person has unique needs when it comes to lending, this guide can help you start looking in the right direction.
- Conventional Loans – Conventional loans are not government backed. They can be either fixed or adjustable rate. If you require a loan that is above limits set by Freddie Mac or Fannie Mae, you will need a non-conforming loan, likely a conventional loan. Conventional loans usually require a standard 20% down payment and substantial credit to qualify.
- FHA Loans – FHA loans are insured by the government. They usually need only around a 3.5 percent down payment and do not require the buyer to have perfect credit. An FHA loan is only given when the home meets certain qualifications and PMI is purchased.
- VA Loans – VA loans are offered to veterans, active-duty military, and their surviving spouses. These loans offer the borrowers the chance to purchase with no down payment and also provides flexibility in underwriting standards.
- USDA Loans – USDA loans are loans given to people with low-to-moderate incomes who want to buy, renovate or repair homes in rural areas. These loans have competitive interest rates and often do not require a down payment. The borrower will need a solid credit history, and the land or property must qualify.
- Kentucky Housing (Or Other State Programs) – The Kentucky Housing Corporation offers two distinct lending programs: MRB and Secondary Market. Both are 30-year loans, and they act similar to the other lending options, depending on how the loan is structured. The state program directly backs the loan, rather than the federal government. Other states have similar programs.
Now that you have some idea of what type of loan you might want to obtain, perhaps it is time to talk to an expert. The team at Liberty Financial is here for you. Contact us today and set up an appointment for a consultation. We can help you every step of the way with the lending process. Your satisfaction is our ultimate goal.