Your lender, bank or mortgage broker can offer you any of the following types of loans:
Conventional Mortgage
A conventional mortgage is a loan to purchase property made between a lending institution and a borrower without a third-party participant (such as the FHA or VA). Most types of conventional loans are paid off over 15, 25, or 30 years. Conventional mortgages can have a fixed rate or adjustable rate.
Terms of a conventional loan vary among lenders, but generally a conventional loan can be obtained with a down payment of between 10-20% of the purchase price. When the down payment is less than 20%, it is often necessary for the loan to have private mortgage insurance (PMI) or be self-insured to protect the lender.
FHA Loan
FHA (Federal Housing Authority) insured loans offer the most liberal credit qualifying with low downpayments and these loans have become quite popular lately! The Federal Housing Authority insures federally qualified lenders against any default payments by the borrower. While the down payment can be as low as 3.5% of the purchase price, the FHA charges the borrower an up-front mortgage insurance premium (MIP) fee. Prepaid interest, called points, may also be charged by the lender.
VA Loan
If you or your spouse is a qualified veteran, you can apply for a VA loan guaranteed by the Department of Veteran Affairs. Under this program, eligible veterans can receive a mortgage loan up to $417,000 with no down payment. Higher loan balances may require a down payment.
VHDA Loan
The Virginia Housing Development Authority (VHDA) is the Commonwealth of Virginia’s mortgage finance agency. Created in 1972 by the Virginia General Assembly, their mission is to help low- and moderate-income Virginians attain quality, affordable housing. VHDA has developed an array of Homeownership Loan Programs designed to remove the barriers of buying a home and meet the changing needs of today’s low- and moderate-income consumer. Home mortgage loans are available for both first-time buyers and repeat homeowners. Most of these loans are originated by private lenders.
