Everything You Should Know About Government-Insured Mortgages
When you’re purchasing a new home, among the most important decisions that you’ll need to make involves the type of mortgage that you’re going to use to buy the property. There are a wide range of mortgage loans to select from, which extend from conventional mortgages to government-insured mortgages. If you qualify for them, among the best mortgage loans available to prospective home buyers are government-insured loans. Before you choose a mortgage type, you should know more about government-insured loans.
Types of Government-Insured Mortgages
While the United States government isn’t an official lender of mortgages, they do back several types of loans, which include FHA loans, USDA loans, and VA loans. Federal Housing Administration loans are available to prospective homeowners who may not have great credit and don’t have a substantial down payment saved up. This loan makes it possible to purchase a home with a credit score of 500 as long as you make a down payment of at least 10 percent. USDA loans are available to moderate-income buyers who wish to purchase a home in a rural area. Some loans provided by the U.S. Department of Agriculture don’t require a down payment. VA loans are available for members of the U.S. military as well as their families. These mortgage loans are typically flexible with low interest rates. Down payments aren’t required and closing costs are kept to a minimum with this loan. (Read more on how to buy a home if you’re self-employed.)
Benefits of These Loans
The main benefit of these loans is that they are available to home buyers who may not qualify for a conventional loan. The general credit requirements are also more relaxed when compared to other loan types. In many cases, you won’t need a large down payment either. If you’re considering a government-insured loan, they are available to first-time and repeat buyers.
Drawbacks of These Loans
Are Government-Insured Mortgages Right For You?
While the benefits of government-insured loans usually outweigh the drawbacks, keep in mind that your borrowing costs will be higher than usual. It’s also important to note that you’ll need to provide extensive documentation to prove that you qualify for this loan type. If you believe that these loans would fit your situation, make sure that you choose the best loan officers in Las Vegas to assist you in finding a mortgage with optimal loan terms.