Which Home Loan Is Right for You?

  • Posted on: 10/14/2020
Which Home Loan Is Right for You?

Are you currently in the market to purchase the home of your dreams? A great first step is to understand the different home loan options that may be available to you. HOMESTAR offers several loan programs, and we work with borrowers to determine the best loan that suits their current needs. Below is a breakdown of each type of loan and their features.

Conventional Loans

A Conventional loan is a loan that is not insured or guaranteed by the federal government. Most Conventional loans have either fixed (set when you take out a loan and does not change, typically have a term of 15 or 30 years) or adjustable (may go up or down) interest rates.

  • 97% maximum financing
  • Fixed- or adjustable-rate
  • Second home, non-owner occupied investment property financing available

FHA Loans

While typical loans require a down payment of 20 percent, an FHA loan allows you to put down as little as 3.5 percent. This loan may be right for a potential borrower with a small amount of money in their savings, but are also required to pay mortgage insurance.

  • 3.5% down payment
  • Fixed- or adjustable-rate
  • Lower payment
  • Limited closing costs
  • Reduced documentation available on certain refinances
  • HUD REO property qualifies for $100 down and max repairs of up to $10,000

VA Loans

This type of loan is available to Veterans, Reservists, Active Duty Personnel, and surviving spouses of Veterans; based on military entitlement. This can be a great alternative to a traditional home loan.

  • No down payment required
  • 30-year and 15-year fixed loans
  • No monthly mortgage insurance premium
  • Limited closing costs
  • No prepayment penalty

USDA Loans

USDA Rural Development loans are designed for those families in rural areas. You are also required to purchase mortgage insurance with this type of loan.

  • No down payment required
  • Easy qualification
  • Not limited to first-time homebuyers
  • Available in certain geographic areas
  • Available for purchase or refinance

Jumbo Loans

A Jumbo loan allows for mortgage amounts above the maximum conforming loan limits. Jumbo loans are available for primary residences, second/vacation homes, and investment properties.

  • Loan amounts up to $3 million
  • Fixed- and adjustable-rate loans
  • Available for single family homes, townhouses, and condos
  • Primary residence and second/vacation homes

Reverse Loans

A Reverse loan is a type of loan that allows you to convert some of the equity in your home into cash while you retain ownership. No repayment is required unless or until the borrower no longer occupies the residence, sells the home, or fails to meet the obligations of the mortgage.

  • No repayment is required until the borrower no longer uses their home as a residence
  • Must be 62 years of age or older and occupy the home as their primary residence
  • No income, employment, or credit qualifying restrictions
  • Home counseling required

* These materials are not from HUD or FHA and were not approved by HUD or a government agency.

203K Loans

Allows borrowers to purchase or refinance a home and make limited upgrades/repairs to the property all under one single loan.

  • FHA qualified property
  • Funds for improvement included in loan
  • Owner-occupied only
  • FHA down payment of 3.5%

Interested in learning more about the home loan application process? Click here or reach out to us today. The HOMESTAR Team is always happy to help, and we look forward to finding the home loan that is perfect for you!

Copyright © 2021. Homestar Financial Corporation 332 Washington St. NW, Gainesville, GA 30501. NMLS #70864. For licensing info: NMLSconsumeraccess.org. This is not a commitment to lend and not all customers will qualify. All terms, information, conditions, rates, and programs are subject to credit and property approval and may change without notice. Not all products are available in all states. Certain other restrictions may apply. Homestar Financial Corporation is an equal housing lender and is not affiliated with any government entity. Updated 3/31/2021.