3 Home Financing Loans in 2022
Are you looking for ways to finance your new home? There are more options available than you might think! If you qualify, you’ll want to take advantage of them as soon as possible.
If you’re ready to learn more, these are the three best home financing loans you can find in 2022. Let’s get started!
1. VA Home Loan
If you qualify, you’ll want to apply for a VA home loan immediately. These loans require a low or no downpayment, so you don’t have to spend more time saving up for your home loan. The Department of Veteran Affairs (VA) also backs most of the loans. It’s an excellent option for financing your new home.
Those eligible to participate in the loan program have met one or more of these points:
- 90 consecutive days of active service while in wartime
- 181 days of service during peacetime
- Six years of service in the Reserves or the National Guard
- The spouse passed away due to a service-related disability or during active service
If you’re unsure if you qualify, you can quickly check if you meet the qualifications online. You can still qualify for this loan even if you don’t meet the above conditions, so it’s worth checking out. You can always reach out to VA lenders and ask questions as well.
Benefits of a VA Home Loan
The VA home loan benefits make it an excellent choice for anyone. Here’s what you need to consider:
- Limited (or no) downpayment
- Low-interest rates
- Low closing costs
- You don’t require Private Mortgage Insurance (PMI)
Plus, you can use this benefit as many times as you want during your life. There’s no limit to how many VA home loans you can use!
This loan is the best option for most people if you’re eligible. Still, if you can’t get a VA home loan, you have plenty of other options to consider to finance your home this year.
2. USDA Home Loan
A USDA home loan also has excellent benefits. The United States Department of Agriculture backs it, giving you access to low-interest rates and low down payments. However, it would help if you moved to an eligible rural area to access this loan.
This option has very low out-of-pocket costs, so you’ll want to check if you’re eligible. While you might not plan on moving to a rural town, you’ll still want to check. The program expanded access to many suburbs and small towns, so you may still be eligible when you think you aren’t.
Benefits of a USDA Home Loan
These are the benefits of a USDA home loan that you’ll want to know about:
- Low fixed interest rate
- No prepayment penalties
- No downpayment required
- You can count repair expenses into the closing costs
So, if you don’t want to live in a city, then make sure to check out this financing option!
3. FHA Home Loan
The Federal Housing Administration backs these mortgages. You won’t need a high credit score, and the downpayment is lower than many other home loans. It’s a great option for first-time homebuyers for these reasons.
FHA loans will offer you the choice between 15 and 30 year-terms that come with fixed interest rates. If you don’t qualify for a private mortgage, you probably can still be eligible for this loan. However, you will need to pay FHA mortgage insurance- which can be expensive.
FHA loans are the best option for borrowers with limited credit histories or low credit scores. The loans have less strict eligibility requirements than most traditional home loans since the FHA backs them.
There’s also a variety of ways for you to qualify for an FHA loan. Here are a few that may apply to you:
- Your FICO credit score is 500 to 579, and you plan on putting 10% down
- Your FICO credit score is 580 or higher, and you plan on putting 3.5% down
- You have verifiable income and employment for the last two years
- You want to use the loan to finance your primary home
Benefits of an FHA Home Loan
There are also several advantages to getting an FHA home loan. Here’s why you might want to choose this option:
- Lower credit qualifications
- Lower downpayment
- Can cover some of the closing costs
- Seller pays some of the costs
- Accepts higher DTI
- Low-interest rates
How Do I Choose a Home Loan?
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When financing your new home, you must choose the best option for your circumstances. However, many are available, making it difficult for many people to decide. We’d have to say that VA home loans are one of the best choices, so you should go for it if you qualify.
Here’s how the above three home loans break down. If you qualify for one of those, it’s likely your best home loan option.
- VA home loan: You were in the military, or you have a connection with someone who is.
- USDA home loan: You plan on moving to a rural or suburban location.
- FHA home loan: You have a lower credit score, and a conventional loan may not work for you.
However, a traditional home loan would be your best choice if you don’t qualify for any of those three home loan financing options. You’ll want to reach out to local lenders for more information.
You may not have to put down any downpayment with these three financing options! This benefit makes it very worthwhile to most families. You won’t need to worry about paying too much in interest either.
Choose a Home Loan Today
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Once you’ve decided on your financing option, you’ll want to reach out with an application. The sooner you can start applying for financing, the better because it can take time for the lender to approve and start the process.
You’ll also want to know if you qualify. Many of these loans offer pre-qualifications, so you’ll want to reach out! Suppose you’re unsure that you meet the home loan requirements. In that case, these home financing lenders provide plenty of information on their web pages.