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    What loan is right for you?

    There are so many things to think about when buying a home – price, area, fees, appraisal, inspection – I bet you didn’t realize there were different kinds of loans out there. Most people are aware that there are VA (Veterans Affair) loans for those either currently in the military or have served our country, but there are several others available. We’re going to focus on the fixed-vs.-variable rate and the government loans


    These are the standard that most home buyers have. There is usually a 15 or 30-year option where the rate is set and that’s what you pay for the term of your loan. The 15-year loan means you will have a higher payment, but will pay less interest and in the end save money.

    Adjustable rate

    This loan has a low interest rate for the first five years, but after that the interest rate will go up every year.

    Federal Housing Administration (FHA) loan

    This is a popular loan for first-time buyers, especially those that have a less than stellar credit score. With a FICO credit score of 500 and a 10 percent down payment you can qualify for this loan. If your credit score is above 580 you can qualify if you have a 3.5 percent down payment.
    One downside to a FHA loan is the mortgage insurance premium, about .85 percent of the loan.

    Veterans Assistance (VA) loan

    A couple of real nice benefits of this loan is zero down payment and no mortgage insurance. Of course to qualify for this loan you will have to have served our country.


    The USDA, yes the same ones that make the food pyramid, offers loans for rural parts of America with conditions similar to the VA loan (no down payment mortgage and have low mortgage insurance fees.) According to the eligibilty map more than 95 percent of areas in America are eligible. It does require at least a 640 credit score.

    FHA 203k Rehab

    If you’re into being Bob Villa or one of those other fixer upper types this loan could be the one for you. It will fund the purchase and renovations you want to make. A standard FHA loan requires the house to be livable, not this one. The loan requirements are the same as an FHA as far as down payment, but your credit score needs to be at least 640.

    Sherri Gregory
    Owner | Principal Broker
    Gregory Home Team – Keller Williams

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