Mortgage Advice

3 Types of Mortgage Loans You Didn’t Know Existed

June 12, 2014

Purchasing a home is a major investment, where one-size-fits-all solutions do not apply. There’s more to choosing a mortgage than deciding between a fixed or adjustable-rate mortgage and getting a 15-year or 30-year loan. It’s all about finding the right loan for you! There are many different types of mortgage loans available, each with unique advantages.

Here are three types of mortgage loans most homebuyers don’t know exist:

FHA 203(k) Loans

Finding the perfect house can seem a lot like finding a needle in a haystack. Even if you’re lucky enough to find a property you like, it might not feel like home—or, at least not yet. If you take a walkthrough and realize it needs a few repairs or could benefit from an upgrade, the FHA 203(k) loan can help you pay for home improvements without having to tap into your savings account!

Under the 203(k) loan program, homebuyers can finance the purchase of their home and desired improvements under a single mortgage loan. Whether you want to replace the roof, buy new appliances or simply paint the walls, there are many benefits of getting a 203(k) loan—take a look at what this newlywed couple was able to do.

Rural Development (RD) Loans

If you’re not keen on city living, and would rather settle down in a rural area, the USDA Rural Development (RD) loan is a great option to consider. To this couple’s surprise, it was the most affordable and cost-efficient way to buy a house. Advantages of RD loans include zero-down financing and the ability to finance repairs. The caveat is that in order to qualify, homes must be located in an eligible rural area. To find out if a property qualifies for this program, visit the USDA Rural Development website.

VA Loans

Exclusively for veterans, VA loans come with special advantages that other mortgage loans don’t have. Available to members of the United States Armed Forces who are on active duty or reserve, as well as widows or widowers of veterans, benefits of VA loans include flexible credit requirements, lower rates, zero down payment and no private monthly mortgage insurance (PMI). Under an act signed by Governor Rick Snyder of Michigan, veterans are also exempt from paying property taxes. There are even grants that allow disabled veterans to easily make modifications to their home.

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