When looking to receive a loan for a home, there are a lot of products out there. It can get confusing. The first step to learning about home loans is knowing your personal needs and which program fits best for you. It is also important to know if you would qualify for some specialized programs. Buying a home can be complicated and confusing even if you have already done it a few times. Gain some based knowledge by reading about the types of loans below.
Wealth Building Loan
This type of loan will allow you to build wealth faster than other options. There is 100% financing available through an Adjustable Rate Mortgage (ARM). It will also allow you to eliminate mortgage insurance earlier in the life of the loan. These loans are perfect for those that spend a lot of money on their education to become a physician, doctor etc, an plan to obtain wealth as time goes on. Overall, this type of loan helps homebuyers build equity quickly by applying more of their payment to principal and less to interest each month.
Federal HOusing Administration (FHA) Loans
The government backs this type of loan. If you have less than perfect credit, you can apply and receive this type of loan. Down payments can be as low as 3.5%. Life of the Loan insurance is required. Energy efficient mortgages, reverse mortgages, refinances and renovation loans are also available in this category. This is a great option if getting the down payment together is going to be tough.
Conventional Home Loans
Conventional programs are also a great option when the down payment is not readily available. This type of loan is a great alternative to FHA Loans because FHA loans require life of loan mortgage insurance with conventional loans have many different insurance options (some without a monthly insurance payment) that could end up saving you thousands of dollars during the life of the loan. With these types of loans, there are first time home buyer programs available, but is not required to be a first time home buyer with this type of loan. There is usually both fixed rate and ARM options. This type of loan is available for loan amounts up to $417,000. Lastly, down payments can be as low as 3% and can even come from gift funds.
Wisconsin Housing and Economic Development Authority (WHEDA) Loans
This type of loan was originally designed and limited to first time home buyers 40 years ago. WHEDA loans are no longer limited to first time home buyers now. There are low, fixed rate mortgage products, an easy close down payment, and closing cost assistance available. A WHEDA Refinance Advantage options are available as well. This program is devoted to help low and moderate income families in Wisconsin attain home ownership on their own.
USDA/RURAL Development Loans
This program is not just for farmers! Most rural areas, small towns and sometimes even suburban communities are considered an eligible USDA properties. The property, however, must be occupied by a home buyer and cannot be used as a rental or vacation home. Like the Wealth Building Loan, there is 100% financing available. These types of loans offer great rates and down payment options (including no down payment). Usually, they offer better terms than FHA and conventional loans. The credit guidelines are flexible which means less than perfect credit may still qualify. Right now they are more affordable than ever! There are income restrictions, which vary by county.
VA Home Loans
VA Loans benefit veterans. This type of loan provides low down payment requirements (sometimes no down payment) as well as no private mortgage insurance. There are insurance requirements but people with less than perfect credit can apply. To read more about VA Loans, check out this recent blog post.
Other Loan Programs
- Medical Professional Program
- HomeReadyTM Loan Program
- First-time home buyer programs
- Jumbo and Super Jumbo Loan Programs
- Reverse Mortgages
If you are interested in getting starting now, contact our partnered Mortgage Team, Dave Grauwels at Waterstone Mortgage. He can offer you all of these options and is extremely knowledgable of the process. His email is Dgrauwels@WaterstoneMortgage.com and his phone number is (608) 234-5118.