We all have to take loans for buying real estate because we simply cannot have a big amount to invest. Therefore, loans are indeed the best option to leverage.
We will discuss five types of loans.
- Federal Housing Administration (FHA) loans
- Conventional loans
- Fixed rate loans
- Adjustable rate loans
- Veteran affairs loans
- Federal Housing Administration Loans
Federal Housing Administration loans are insured by the Federal Housing Administration which is a government agency in the United States. FHA loans are designed for the people who have lower credit scores and have the capacity of paying lower down payment as well.
By 2020, borrowers can borrow money up to 96.5% of the value of their home with the help of FHA loan. Therefore, a borrower will only need to pay 3.5% in down payment.
Borrowers have to qualify for an FHA loan. In addition, they must have to purchase mortgage insurance, and premium by using FHA.