Beginning the Tustin home loan process can be overwhelming for any first-time home buyer. With multiple different options available to choose from, it can be difficult trying to find out which option best fits your financial needs. So, to help you get started, Matthew Campbell with American Financial Network Inc. has listed the three most common mortgage loans: Conventional loans, FHA loans, and VA loans.
Conventional loans are ones that are not insured by the government. The most common type of conventional loans is a conforming loan, which follows the Fannie Mae and Freddie Mac guidelines. These guidelines state that the maximum borrowing limit for one loan is $453,100. To qualify for a conforming loan, your credit score should be at least 620.
Another type of conventional loan is a non-conforming loan, such as a jumbo loan, which allows you to borrow more than the allotted amount for conforming loans. This is a great option if you are planning on purchasing a larger piece of property. However, to qualify for a jumbo loan, you will be required to pay a higher down payment and will need to have great credit, typically around 740. Contact your Tustin mortgage lender for more information.
An FHA loan is a government-backed loan that is administered by the Federal Housing Administration. This loan is an excellent option for first-time homebuyers because of the low down payment requirement and the low-interest rates.
To qualify for an FHA loan, your credit score can be as low as 500. However, if your credit is between 500 and 579, you will be required to pay at least 10% of your home’s down payment. If your credit score is 580 or higher, you only have to pay 3.5% of your down payment.
If you are a veteran or a current member in the armed forces, you could qualify for a VA loan. This mortgage is also a government-backed loan and is administered by the United States Department of Veteran Affairs. To qualify for this loan, you will need to have served a minimum of 90 days consecutively during wartime, or 181 consecutive days during peacetime. If you were/are enlisted in the Reserves or the National Guard, there is a 6-year minimum requirement to qualify.
VA loans offer low-interest rates and there is zero percent down payment requirement. To see if you qualify, contact your Tustin mortgage lender today!
For more information on the three most common mortgages or to get started on your application for a mortgage in Tustin, please contact Matthew Campbell at 714-241-2326.