FHA loans are one of the most popular and easiest types of home loans to get. They require a lower down payment than conventional loans and have less stringent credit requirements. FHA loans are great for first-time homebuyers, as they allow a down payment of as little as 3.5%. ARM loans also offer lower initial loan costs and rate limits that limit how much your interest can go up or down over the course of your loan.
VA home loans are the easiest 100% mortgage finance option, as they do not require a down payment and have lenient credit requirements. USDA loans also have income and location requirements, but they offer no down payment options. Buyers who plan to move or refinance at the end of their introductory period can save money by choosing an ARM loan. Ideal for borrowers who want help from a loan officer, in person or on the phone, to decide among the wide range of mortgage options available, including loans to buy and renew.
Fannie Mae's HomeReady loan is designed for low-income borrowers with credit scores of 620 or higher and requires only a 3% down payment. Government-backed loan programs such as FHA, VA, and USDA generally have lower credit rating requirements than conventional mortgages. VA home loans are often the most affordable, both in upfront and monthly costs, as they do not require private mortgage insurance regardless of the down payment amount. Your credit score can determine the types of mortgage loans you are eligible for, the interest rate you will be offered, and the amount of down payment you must make.
Your lender may require you to have up to 12 months of mortgage payments in your savings account before you can get a loan. Your loan officer or mortgage broker will provide you with experience and guidance to help you make the best decision.