The Different Types of Non-Conventional Loans

by | Jun 10, 2020

If you are entering the early stages of purchasing a home, you’ve very likely quickly realized that there is a multitude of loan options out there. All of these options are available for a reason! A standard fixed rate or adjustable rate mortgage simply aren’t the best options for everyone. If you are interested in exploring non-conventional loan options, check out this breakdown consisting of explanations of the most common types.

FHA Loan

FHA loans are extremely popular among first time homebuyers. They are insured by the Federal Housing Administration and are a great option for buyers with lower credit scores or limited savings funds. If you are looking to purchase your first home, consider the following benefits that an FHA loan could provide:

  • Minimum 3.5% down payment
  • Permits higher debt to income ratio than most alternatives
  • Minimum credit score of 600

VA Loan

VA loans are a type of home loan issued to Veterans by private companies that are guaranteed by the U.S. Department of Veterans Affairs. If you have served and obtained eligibility, it is definitely worth looking into using a VA loan for the purchase of your new home. The main perks associated with VA loans are as follows:

  • Zero down payment required
  • No private mortgage insurance charges regardless of down payment size
  • Can be used as much as the buyer prefers (provided any past VA loans are paid off or the property has been sold)
  • No prepayment penalty
  • Minimum credit score of 580

USDA Loan

USDA loans are great for homebuyers who feel most at home in more secluded, open areas. They are backed by U.S. Department of Agriculture as part of its USDA Rural Development Guaranteed Housing Loan program. Essentially, the loan was introduced as a way to incentivize homeownership in rural areas. The end result is a loan option with plenty of notable benefits:

  • Zero down payment required
  • No prepayment penalty
  • Low interest rates and PMI
  • Minimum credit score of 620

Secure Your Non-Conventional Loan with Golden Lenders

Golden Lenders helps home buyers in Colorado, Florida and California understand the different types of mortgages that are available and provides loans to help people achieve the dream of homeownership. Since the specifics of which mortgage to choose is dependent on a variety of factors, we encourage you to call us for more information and find out which is right for you. Our number is (303) 482-2361, or you can send us a message.