Choosing the right mortgage is just as important as finding the right property. When you work with Priority Financial Services as your mortgage broker, we can help you choose the right mortgage product for your individual situation.
Here are the most common types of mortgages and the circumstances in which they are most suitable.
Conventional Mortgage
The most common type of mortgage is a conventional mortgage, which is not backed by any government agency. These loans typically require a minimum down payment of 5% to 20% of the purchase price and have a fixed or adjustable interest rate. A conventional mortgage is suitable for borrowers with good credit who have saved up enough for a down payment.
VA Mortgage
A VA mortgage is a type of loan that is guaranteed by the U.S. Department of Veterans Affairs and is available to eligible veterans, active-duty service members, and surviving spouses. These loans require no down payment and have no mortgage insurance premiums. A VA mortgage is suitable for those who have served in the military and are looking to purchase a home.
FHA Mortgage
The Federal Housing Administration insures FHA mortgages. These loans require a minimum down payment of 3.5% and have more lenient credit requirements than conventional loans. FHA mortgages are suitable for borrowers with lower credit scores or limited funds for a down payment.
USDA Mortgage
The U.S. Department of Agriculture guarantees USDA mortgages, which are designed for people living in areas designated as rural. These loans require no down payment and have more flexible credit requirements. Some parts of Allegheny County are eligible for USDA loans.
Jumbo Mortgage
A jumbo mortgage is a loan that exceeds the limits set by Fannie Mae and Freddie Mac for conventional mortgages. These loans typically require a higher down payment and have stricter credit requirements. A jumbo mortgage is suitable for borrowers who need to finance a high-value property.
New Construction Loan
You’ll need a new construction loan to finance the construction of a new home. Read more about construction loans.
Commercial Mortgage
A commercial mortgage finances commercial properties, such as office buildings, warehouses, and retail spaces. These loans typically have higher interest rates and require a larger down payment than residential mortgages. A commercial mortgage is suitable for those looking to invest in commercial real estate.
There is no one-size-fits-all solution when it comes to choosing a mortgage. The right mortgage for you will depend on your individual circumstances, such as your credit score, down payment amount, and the type of property you are looking to purchase. Priority Financial Services will help you determine which type of mortgage best suits your needs.