From FHA to USDA - Choosing Your Mortgage

by Susan Cioffi 11/03/2019

Photo by Alexander Stein via Pixabay

When it comes to a mortgage, most of us think of the same standard product; the 15 or 30 year conventional mortgage offered by banks and lenders. This is not the only mortgage option you have, though. Depending on your personal history and circumstances you may qualify for an attractive mortgage with lower rates and a small down payment. Examining your options and determining if you qualify for a less common type of mortgage allows you to have the greatest amount of flexibility and more options when it comes to your new home. Learning more about the different types of mortgages ensures you get the best possible terms when it comes to this significant purchase.

FHA, VA and USDA Loans: Explore your Mortgage Options

FHA Loans

An FHA loan is one that is insured by the Federal Housing Administration; if the buyer was to default or fail to pay, the FHA would pay the lender instead. Because of this guarantee, lenders are able to offer mortgages with less rigid requirements and accept more potential risk. FHA loans benefit the borrower in several key ways; they offer low down payments, credit score requirements of just 620 and that FHA guarantee for lenders. There are income guidelines and limits for the amount that can be borrowed, so you should check to see if your potential loan qualifies. A fast and easy approval process makes this a good option for many borrowers, though you should note PMI (Private Mortgage Insurance) is required and adds an additional amount to your monthly bill. 

USDA Loans

Often the most overlooked and misunderstood, a USDA loan is backed by the Department of Agriculture in the same way an FHA loan is backed by the Housing Administration. USDA loans are designed to help people in rural and suburban areas become homeowners and offer attractive rates and very low closing costs and down payments. If you are looking for a mortgage, it is worth checking your eligibility. Both your income and the home you are considering need to be eligible, but since an estimated 90% of the homes in the country qualify, USDA could be the right product for you.

VA Loans

A VA loan is backed by the Veteran's Administration and is available to active members and veterans of the US armed forces. This is the most attractive alternative to conventional loans of all, if you qualify. Designed to make it easy for service members to buy a home, this loan features little or no down payment, easy lending guidelines and appealing rates for veterans. If you qualify, the VA loan is an excellent option for your new home. 

Learning about your options makes it easy to find the right home mortgage for your situation. Chances are, you will qualify for one or more of the loan types above; you should compare the terms of the FHA, USDA or VA loan you are considering with a conventional mortgage to make the best possible choice for your new home purchase. 

About the Author
Author

Susan Cioffi

My name is Susan Cioffi. I have been a Realtor for 15  years now. I pride myself in customer service. I have won the Diamond award for volume with my first brokerage, but also won the Customer Service award that same year, so I am very proud of that. I specialize as a Listing Agent,  Property Management, New Home Sales, Buyers, Waterfront, Rentals, Condo Conversions in the South Shore Area (Riverview, Apollo Beach, Lithia, Brandon, Gibsonton). I am active in the community and with the Riverview Chamber of Commerce. Awarded Volunteer of the year in 2007. Also giving to various charities. Each year we raise money to help homeless veterans in the area with their Christmas gift. Also give to Children's Miracle network all year with every closing I have.

Originally from Boston, we moved here over 16 years ago. It's hard to believe it's been that long. We miss family and friends but we love the Florida Lifestyle. I have been married for almost 31 years to my husband, Vin. I have two wonderful children, Vincent (29), and Christopher (23), and a dog, Bandit. Plus my first grandchild, Colton, who is 1 and 1/2.   I also have my mother that live right down the street from house, and my brothers are also close to us. We live in the great community of Lake St Charles.