In August, interest rates hit a whopping 7.23% for mortgages, which is the highest they have been since 2001. But if this is your time to purchase a home, then you might not have much flexibility in terms of the timeline. So, what can you do to make your mortgage rates as affordable as possible? One suggestion is to pick the most suitable type of mortgage for your individual scenario. Here are a few mortgage products to consider.
Mortgage Products to Assist You in Purchasing a Home
- FHA. The first time of mortgage you might want to check into is an FHA mortgage. This is a type of loan that is backed by the Federal Housing Administration. FHA loans feature affordable interest rates, low down payments, and flexible qualifications. First-time and returning homebuyers alike can qualify for them. There are no special requirements regarding veteran status, income level, or where you are buying your home. That makes them an excellent fit for a broad range of borrowers.
- VA. If you do happen to be a veteran, active-duty service member, or eligible surviving spouse, you will also want to look into whether you are eligible for a VA loan. This type of mortgage is backed by the Department of Veterans Affairs. Like FHA mortgages, VA mortgages feature flexible qualifications and affordable rates, even when you do not have a perfect credit score. But instead of a low down payment requirement, they let you buy a home with no down payment. VA loans also do not require you to pay for PMI.
- USDA. Another type of mortgage that features backing from a government agency is a USDA home loan. The US Department of Agriculture guarantees these mortgages. Features of USDA loans include affordable rates, easy credit qualifications and zero down payment, similar to many of the features of a VA loan. One thing to know is that you do need to meet income requirements, and you can only use this type of home loan to buy a property in a rural location.
- Conventional. Borrowers may not think to look toward conventional loans when they are trying to keep their interest rates low, but sometimes it is exactly the right move. When your borrower profile is solid and you can make a significant down payment on a home, a conventional loan may have competitive rates.
First Residential Mortgage Can Connect You with a Competitive Home Loan
You probably have a lot of questions at this point. “Which of these types of mortgages do I qualify for? Which will help me get the most affordable rates? How will the other features of each type of loan product affect my finances?”
These are all questions that we can help you answer during your consultation. To get started, please give us a call at (540) 838-5868. We can help you buy a home or refinance in the Blacksburg area or anywhere in Virginia.