When applying for a home loan, a smart consumer considers not only the lender’s reputation but also the types of loans the lender offers. It is important to carefully assess the different kinds of home loans so you can select the best one that fits your financial needs.
Mortgages that are offered by the Federal Housing Administration are called FHA loans. They are usually offered to first-time homebuyers and low- to moderate-income borrowers with low credit scores. If cannot afford to make a down payment bigger than 3.5%, this is the type of home loan you may want to consider.
This kind of loan is not insured and backed by the FHA. Lenders used to require a higher down payment of around 20%, but these days, you can get away with as little as a 3% down payment. What makes conventional loans different (and sometimes better) than FHA loans is that they can be used to buy vacation homes or rental properties.
Like FHA loans, USDA loans are also designed for low to moderate-income earners. However, they are specifically offered to buyers intending to stay or move to rural areas in Colorado. USDA loans come with low-interest rates and do not require a down payment from eligible borrowers.
Do you have a high credit score and an excellent credit record? Then you may be qualified to get jumbo loans. These types of home loans can exceed the conforming loan size limit, allowing borrowers to buy expensive properties in the most beautiful neighborhoods.
Those who have served the military can access VA loans, which are mortgage loans guaranteed by the U.S. Department of Veteran Affairs. These are often used for buying homes, but they can also be used to refinance an existing mortgage in Colorado.
Down Payment Assistance
This is an affordable program that is designed to help first-time buyers overcome the high downpayment requirements of homes in Colorado. Down payment assistance programs can cover some or all the required downpayment amount. Some programs can even provide money for closing costs.