A Conventional Loan is a mortgage from a private lender, like a bank, that isn’t backed by the government. It usually requires a good credit score and a stable income. There are two main types: fixed-rate (same interest rate for the loan’s life) and adjustable-rate (interest rate can change).
An FHA Loan is a mortgage insured by the Federal Housing Administration (FHA), designed to help homebuyers with lower credit scores or limited savings for a down payment. These loans are popular among first-time homebuyers because they have more lenient qualification requirements compared to conventional loans.
A VA Loan is a mortgage option backed by the U.S. Department of Veterans Affairs, designed specifically for veterans, active-duty service members, and their surviving spouses. These loans are issued by private lenders, such as banks and mortgage companies, but come with several benefits.
A USDA Loan is a mortgage option backed by the U.S. Department of Agriculture, aimed at helping low- to moderate-income buyers purchase homes in eligible rural and suburban areas.
A Jumbo Loan is a type of mortgage that exceeds the limits set by the Federal Housing Finance Agency (FHFA) for conforming loans.
A Cash-Out Loan allows homeowners to refinance their mortgage for a larger amount and receive the difference in cash. This can be used for home improvements, debt consolidation, or other financial needs. With potentially lower interest rates compared to personal loans or credit cards, it’s a cost-effective way to access funds. Plus, the interest may be tax-deductible if used for home improvements.
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home. It offers lower interest rates than credit cards and personal loans, with flexible borrowing and repayment options during the draw period. Ideal for home improvements, debt consolidation, or unexpected expenses.
A Non-QM (Non-Qualified Mortgage) loan is for borrowers who don’t meet conventional loan criteria. It offers flexible income verification, making it ideal for self-employed individuals or those with irregular income. While it may have higher interest rates and larger down payment requirements, it provides an alternative path to homeownership for those with unique financial situations.
A DSCR (Debt Service Coverage Ratio) loan is for real estate investors, based on the property’s income rather than personal income. It uses rental income to determine eligibility, making it ideal for income-generating properties. DSCR loans offer flexible terms and can be used for residential, commercial, and industrial properties.
A Down Payment Assistance Loan helps cover the initial costs of buying a home. These programs offer grants, forgivable loans, or low-interest loans to reduce the down payment and sometimes closing costs. They are typically aimed at first-time homebuyers or those with limited savings, making homeownership more accessible and affordable.
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