Conventional loans are mortgages that are not guaranteed or insured by the federal government. A conventional loan generally follows the guidelines of government-sponsored enterprises (GSE's) like Fannie Mae or Freddie Mac. Conventional loans are known as either conforming loans or non-conforming loans. Conforming loans follow the terms and conditions set by Fannie Mae and Freddie Mac, while non-conforming loans are those that do not meet the Fannie Mae or Freddie Mac guidelines. Whether you're buying a home or refinancing your mortgage, a conventional loan might be right for you. If you're not sure about your credit rating or if you have any concerns about a down payment, conventional mortgages can give you low closing costs and flexible payment options.
FHA loans can be the perfect option for first-time homebuyers. FHA loans are mortgages that are insured by the Federal Housing Administration, which is a government agency within the U.S. Department of Housing and Urban Development. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan.
If you've served in any branch of the U.S. military, you are eligible to receive a Certificate of Eligibility (COE) that will help you acquire a VA loan. You can use a VA loan to buy a home, a condominium unit in a VA-approved project, build a new home, purchase and improve a home simultaneously, make home improvements by installing energy-related features or making a home energy efficient, or buy a manufactured home and/or lot.
The USDA loan program was developed to assist approved lenders in providing low- and moderate-income households the opportunity to own adequate, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants can build, rehabilitate, improve or relocate a dwelling in one of the eligible rural areas. You can check here to see if your area is eligible.
If you're looking to refinance your mortgage, you'll be creating a new mortgage while still paying off your existing one. You can also combine both a primary mortgage and a secondary mortgage into a new loan. Refinancing involves many of the same procedures and the same types of costs that you probably encountered when you secured your original mortgage. Your home can be your most valuable financial asset, so take caution when reviewing specific mortgage costs.