When it comes to mortgages, there are a lot of different options out there. However, the differences aren't necessarily easy to spot, especially since there are so many different acronyms that get thrown around. To help you get a better understanding of mortgages and what is best for you, here is an explanation of three less common mortgage types:
These mortgages are backed by the government and generally require a form of mortgage insurance. This means that you will likely need to pay a monthly insurance premium on top of your regular mortgage payments. In turn, this means that you will likely pay more per month with an FHA loan than you would pay for regular loans.
It may sound bad so far, but FHA loans are much more accessible to many homeowners than other mortgages. Down payments are generally lower, as are credit requirements, which means that you can get an FHA loan even if you have been denied non-FHA loans.
It's important to note that FHA loans can be either fixed-rate or adjustable-rate, which means that you can pick an option that fits your needs.
VA mortgages are offered to veterans and the spouses of deceased veterans, with the primary benefits being reduced down payments and exemption from mortgage insurance. However, you do need to meet specific requirements regarding the duration of your service, so you should talk to a real estate agent to figure out whether you qualify or not.
VA mortgages allows veterans to start mortgages with great ease, which can make their transition to civilian life much easier. If you have been trouble finding a mortgage with competitive interest rates and a low down payment, then a VA loan might be perfect for you.
To understand what a jumbo mortgage is, you first need to know that loans are actually limited to a specific amount, with the maximum being determined by laws in each individual county. In general, this limit is between $400,000 and $600,000.
A jumbo mortgage is for an amount that is larger than those limits, which means that you might need a jumbo loan if you want to buy an extremely expensive home or a home that is in a very expensive area. As a result, these loans have much higher requirements than other loans, so you need to make sure that you have high credit rating and enough money for a large down payment before proceeding. For more information, contact a company like Foreside Real Estate Management.