As a first time home buyer it is important to be aware of the variety of loans out there that can be used to purchase your home. While each loan has different qualifications, investigating all of your options with your mortgage lender can help you determine the loan that is right for you. The following are popular loan options that are used to buy a home in 22508 and beyond.
Conventional Loan
A conventional loan is not backed by the government; instead a private lender backs the mortgage so the qualifications to receive this type of mortgage are stricter than other options.
As with any mortgage, buyers will have to do a home appraisal, provide financial documents, and meet certain credit and debt to income ratio thresholds to qualify for a conventional loan. Buyers will also have to make a down payment for the home.
Learn more details about conventional loans here.
FHA Loan
There are many people who use an FHA loan when searching for a home in 22508. Unlike conventional loans, FHA loans are backed by the government. The credit score requirements for an FHA loan are lower than a conventional loan.
When you find a home in 22508 with an FHA loan, the home appraisal must be completed by an FHA approved appraiser. These appraisals have standards for the home’s health and safety (determined by HUD) that must be met. This means that a home that is a complete remodel (think taking it down to the studs) will not qualify for an FHA loan.
Learn more about FHA loans here.
USDA Loan
USDA loans, also known as rural development loans, are government backed loans meant to encourage growth and access to homes in rural areas. Home in 22508 and the surrounding areas are eligible to receive a USDA loan. With the exception of some areas surrounding cities like Fredericksburg, this map will help you determine if a property is in an eligible area.
There are household income limits and a minimum credit score to qualify for this type of loan.
Learn more about USDA loans here.
VA Loan
This type of loan is available only to buyers who are part of the armed forces or national guard. Since these loans are processed through private lenders, the minimum credit score can vary. VA loans require no down payment or private mortgage insurance.
VA loans also limit the amount of closing costs that the buyers can pay. The interest rate for this type of loan is usually lower than a conventional loan too.
Specific requirements for each type of loan and interest rates are always changing, so it is always best to talk with your mortgage lender to get the most relevant information tailored to your financial information.
Different lenders offer different mortgages. As a first time home buyer, you can speak with different lenders to find the one who offers the best product for you. It is also wise to talk to a lender before you start your search for a home in 22508 or beyond because the lender can offer suggestions for ways to improve your credit score or debt to income ratio.
When you are ready to start your search for a home in 22508, you can begin here.
