You will need to talk to a Lender to determine which loan is best for you, but here are some brief definitions of different home loans available.
FHA
FHA (Federal Housing Administration) is a fixed rate mortgage guaranteed by the FHA. These loans can be easier to qualify for, and usually require a down payment of 3.5%. FHA is a part of HUD (U.S. Department of Urban Development). Can be used for the purchase of condos, multi-family units, or manufactured homes, but purchaser must occupy the property. Purchaser must pay PI (premium insurance). This is either paid upfront, or can be financed into the loan. Can not have more than one FHA loan at a time.
VA
VA (Veterans Affairs) loans are insured by the VA. Veterans must have certificate of eligibility. Loans are assumable, as long as qualified. Closing costs are limited by VA. Seller must pay certain costs for buyer. No penalty for prepayment of loan. Often have no down payment, and lower interest rates than other loans.
CONVENTIONAL
A conventional loan is not insured or guaranteed by the government. Conventional loans come in many different options. They can be conforming or non-conforming. They can be a fixed rate mortgage or adjutable rate mortgage. Jumbo loans and balloon payments are also under the conventional loan relm. The down payment for a conventional is a minimum of 10%. If the loan to value ration is greater than 80%, purchaser is required to have Private Mortgage Insurance.
Conforming loans follow the terms set by Fannie Mae and Freddie Mac. Non-Conforming do not follow those terms. Jumbo Loans usually have higher interest rates and are above the maximum loan amount established by Fannie Mae and Freddie Mac ($417,000 for single family homes).
30-Year Fixed Rate Mortgage is the typical conventional loan. It basically means what it says. Its rate is fixed for the life of the loan (30 years). It requires a 20% down payment, but if purchasers can't come up with the down payment they can still get the loan and pay for PMI ( Private Mortgage Insurance).
Other Types of Loans
FHA 203K
Loans used for rehabilitation and repairs. The property and the borrower must qualify for this type of loan, but this is typical for an FHA loan. The borrower will be reimbursed the amount for the repairs, so they should have enough cash or credit to cover costs of repairs. The interest rate may be a little higher, but you still only have to have 3.5% down payment. $5,000 minimum repair amount Property must be at least one year old must be owner occupant, no investors
