The Real Estate Blog

In my previous post I talked about the two main types of mortgage loans–fixed rate and adjustable rate mortgage loans. In this post I will identify three government guaranteed mortgages.

The Federal Housing Administration (FHA) loan is a perfect choice especially for those with a low income. Their offered mortgages are backed by the government, with the FHA providing a guarantee for the loan.

There are several types of FHA loans available, including fixed rate, adjustable rate and growing equity. The most popular loan that the FHA offers is the fixed-rate 203(b).  This loan is ideal for first-time home buyers, since you can finance up to 97 percent of the home loan. That way you have low mortgage payments and the closing costs are decreased significantly. The insurance on the mortgage is factored into the monthly payments at 0.5 percent of the total loan.

VA loans, which are also backed by the government, are for military service veterans.  The US government offers many benefits to veterans and the surviving spouses of those who died during active duty. These home loans do not require an initial down payment, which means 100 percent financing is available.

With a USDA Rural Development Guaranteed housing loan, families who want to live in developing areas and don’t already have adequate housing can get a loan without a down payment. To qualify, you need a good credit history and have steady employment in order to make monthly loan, tax and insurance payments.

Loan eligibility usually depends on your income and where you want to live. Take the time to study all the options available to you before you make a decision on the type of mortgage you want to commit to.

Photo © CaseySerin

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