When you’re applying for a loan, you might be unclear about what type of loan you’re looking for. The Federal Housing Administration (FHA) and the Veterans Administration (VA) offer loans to a variety of borrowers with a number of benefits for each.
The FHA is an agency whose main goal is to help provide housing opportunities for low- to moderate-income families, with or without a military background. Meanwhile, the VA guarantees home loans made available to veterans and military personnel only, without any down payment.
Qualifying requirements, down payments and fees can vary between the two programs. There are a number of differences, so when you’re considering your mortgage options, be sure to look at the benefits of both. Here are some benefits of each type of loan:
FHA Loans
· First time homebuyers pay as little as 3% down
· Lower closing costs than conventional loans
· HUD-approved mortgage counseling
· Lower interest rates in some market conditions
VA Loans
· No down payment required
· 100% refinancing on purchases and refinances
· Loans up to $417,000 in 2009 (higher in some counties)
· No Private Mortgage Insurance (PMI)
Home ownership is a big deal, knowing which loan is right for you could make all the difference. Talk to a lender to get the full list of benefits, guidelines and restrictions of every loan type.
Facts from this article are from this source.
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