Construction is picking up again, but sometimes people don’t want to make the typically large down payment. For people who believe the age-old adage, “cash is king,” these programs let you keep more of your money at the beginning of the construction process.
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VA loans obviously require current or prior military experience and an honorable discharge. These loans do not require monthly mortgage insurance, and the rates are excellent. VA rates are typically as good as, if not better than, most conventional rates since the lender has a guarantee in place from the government that the loan will perform.
The FHA loan is often referred to as the “first-time home buyer” loan. However, you do not have to be a first-time home buyer. In fact, you can own other properties and still qualify for an FHA loan.
The FHA loan is popular because a low down payment is allowed, and the rates are wonderful. In fact, they are better than many conventional loans, but you have to look at the total payment because an FHA loan also requires monthly mortgage insurance to be added to your payment.
FHA-insured loans have a much higher tolerance for lower credit scores and allow you to borrow more — in respects to income — than any other loan product.