Types of Home Loans
Conventional loans are the most commonly used home loans. Conventional loans allow for the purchase of nearly any residential property type and offer a range of down payment options, some as low as 3%. Some advantages include reduced documentation, no mortgage insurance for loans with 20% or greater down payments, and competitive pricing.
A Reverse Mortgage is a loan for homeowners age 62 years or older that allows them to use the equity in their home for financial security or to maintain a quality of life throughout retirement. It does not have a monthly mortgage payment and allows the homeowner to receive the equity in their house in a lump sum, a fixed monthly payment, or a line of credit. In most instances, the loan is paid off with the sale of the home by the estate.
Jumbo loans are fixed-rate and adjustable-rate mortgage products for higher-priced primary homes, second homes, or investment properties, allowing borrowers to obtain a larger loan that exceeds conventional lending limits such as loans.
VA loans (Veterans) are guaranteed by the U.S. Department of Veterans Affairs (VA) and offer an insured loan product for veterans and their spouses. Advantages include up to 100% financing, competitive interest rates, and no mortgage insurance for eligible borrowers.
FHA loans, insured by the Federal Housing Administration, offer a low down-payment minimum of 3.5% along with flexible credit and debt requirements. They allow for a non-occupant co-borrower such as a parent or relative, making them an excellent option for first-time homebuyers and low-to-moderate-income borrowers.
A HELOC is a revolving line of credit, similar to a credit card, that offers a way to borrow money using the equity in your home. It provides the flexibility of drawing money as needed instead of taking it all in one lump sum. It may even be 100% tax-deductible!