USDA loans are aimed at buyers in rural and suburban areas and are backed by the USDA. These loans promote affordable housing in less-populated regions. Key Features: • Down Payment: No down payment required. • Credit Score: Typically 640 or higher. • Income Limits: Must meet specific income requirements, which vary by location and household size. • Mortgage Insurance: Requires an upfront guarantee fee and an annual fee, both of which are lower than FHA premiums.
Ideal Buyer: • Looking to purchase in a rural or suburban area. • Moderate to low household income.
5. Jumbo Loans
Jumbo loans are used for homes that exceed the conforming loan limits set by the FHFA. These are non-conforming loans and carry higher risks for lenders. Key Features: • Down Payment: Typically requires at least 10%-20%. • Credit Score: Minimum score of 680-700 is often required. • Loan Limits: Exceeds the limits of conventional loans (e.g., $726,200 in most areas for 2023). • Interest Rates: Slightly higher than conventional loans due to increased risk.
Ideal Buyer: • Purchasing high-value properties. • Strong financial position and high credit score.
6. Adjustable-Rate Mortgages (ARMs) s (ARMs)
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