Are you thinking about getting a home loan? Don’t have any idea what are the different types of mortgage? Today is your lucky day because this article, we will discuss what is FHA, VA, and Conventional Loans Arlington. You need to know the meaning of each loan and its requirements. Newbie or professional, this guide will help you out.
What are FHA Loans and their requirements?
FHA stands for Federal Housing Administration. The agency provides mortgage insurance to FHA-approved lenders. Did you know that FHA is the largest insurer of residential mortgages all over the world? Cool! Since 1934, they are already insuring millions of properties. They make every home buyer dream come true. Whether you’re single or multi-family, you can trust this loan. Take note of the following.
- You need a score of at least 580 = 3.5% down payment.
- A score between 500 and 579 is equal to a 10% down payment.
- MIP or Mortgage Insurance Premium is required.
- Your debt-to-income ratio is less than 43%.
- The home must be the borrower’s main residence.
- You need a steady income and proof of employment.
Good Read: FHA Loan Requirements in 2019
What are VA loans and their requirements?
VA stands for Veterans Affairs. The United States Department of Veterans Affairs guarantees the VA loan. If you’re a veteran, you can get this loan through private lenders, like banks and other mortgage companies. But remember, it must be for your residence and not for somebody else. This type of loan also guaranty the lender and borrower against loss. Check the following if you’re eligible.
- Check the following if you’re eligible.
- Active service during wartime is 90 consecutive days.
- Active service during peacetime is 181 days.
- You have 6 years or more service in the National Guard.
- If you’re a wife, your spouse died in the line of duty.
What are Conventional Loans and their requirements?
A conventional mortgage also recognized as the conventional credit is one of the types of home buyer’s loan that is not secured by a government. The Federal Housing Administration provides the FHA loan. On the other hand, the US Department of Veterans Affairs awards the VA loan. A conventional loan is different from these government entities. This loan is available through credit unions, mortgage companies, or could be two government-sponsored enterprises. Read the list below for eligibility.
- The credit score requirement is between 620-640.
- Unlike government-backed loan programs, conventional loans can be for a primary residence, second home, vacation, or rental property.
- The eligible property type is the following: duplexes, single-family homes, townhouses, and condominiums.
- The debt-to-income ratio is or less than 43%.
- You also need to verify your bank, and investment statements, to make sure you have sufficient assets.
So what is the best of these three?
Well, it depends on your eligibility. Every mortgage loan, either FHA, VA or Conventional Loans Arlington, has its benefits. Based on these facts, you need to weigh things and choose what’s best for you. Home loans, in general, will help you get the dream house you wanted. So check each eligibility now and process your home loan in no time.