FHA loans are appealing financing options, but there may be another type of loan better suited to your personal situation. The government offers other home loans to potential buyers looking for similar benefits. For example, a 203k loan can help you make much-needed improvements or repairs on a home you are interested in buying. Other loans may be better for buyers who have served in the military.
Regardless of whether you are a first time home buyer, it’s in your best interest to consider all your home loan options before applying for financing. There may be important benefits that you are missing out on. Continue reading to learn about other home loans and financing options for potential homeowners.
The process of buying a home is important, but so is the process of choosing how you will buy it. Home loans allow you to finance a large part of the overall cost of a home, which most people cannot afford to pay all at once. But not all home loans are created equal.
There are many mortgage options out there, each of which have different requirements, terms and rates. There are some home loans that are only available to specific types of people, while other loans are reserved for particular uses.
For example, a 203k loan is only available for buyers looking to purchase a fixer-upper or a home that needs repairs. This type of mortgage allows you to not only finance the cost of the home, but the cost of repairs as well.
The 203k loan program does have a few strict requirements, such as the repair cost limit. Currently, you can only finance a maximum of $35,000 for repairs. You must also live in the home after the repairs are made, so “flipping” the home with a 203k loan is not allowed.
There are a few other home loans you should consider before you apply for financing. These are:
· VA home loans – these loans are designed for veterans and military families. They are issued by the Department of Veteran Affairs and have veteran-specific requirements. VA loans are known for their flexible terms and low down payment requirements.
· FHA loans – these loans are ideal for borrowers with poor credit or those looking to make low down payments.
· USDA loans – this type of mortgage is reserved for borrowers planning to live in a rural area. The U.S. Department of Agriculture sets the location criteria and oversees this loan program.