If you’re looking at buying a home in 2022, there are several types of mortgage loans available for you to choose from. Trying to figure out the best type of mortgage loan amongst the different types of mortgage loans is not the easiest process.
The best way to know the best type of mortgage loan among the several types of home loan options available to you is by confirming certain facts like the amount of down payment you will be required to give, your monthly budget, and the state of your credit, specifically your credit score.
These 3 things go a long way in determining which of the forms of mortgage is the best type of mortgage loan for you.
In this post, we’ll tell you all about the types of mortgage loans available in 2022 and what their requirements are, to help you decide on the best type of mortgage loan for you. Let’s dive in.
What type of mortgage loans are there?
Even though there are different types of mortgage loans, they are not available to everybody.
If you’re wondering what type of mortgage loans are there to be obtained in 2022, then read on carefully. You need to be enlightened about the types of mortgage loans available in 2022 as you set out to buy your house; you also need to understand their requirements.
The types of mortgage loans available in 2022 include:
- Conventional mortgage loans
- FHA loans
- VA loans
- USDA loans, and
- Jumbo mortgage loans
Conventional mortgage loans
Conventional mortgage loans generally are a great fit for people who can put at least 3% down, have good employment history, and a reasonable credit score (although an excellent credit will greatly improve your chances of getting approved and the conditions of your loan).
A conventional mortgage loan doesn’t give mortgage insurance if you put down 20%, and if you put down less than 20%, the mortgage insurance is not for the life of the loan.
Conventional loans meet the limits set by Fannie Mae and Freddie Mac.
FHA requires at least 3.5% down. It typically fits people who don’t have an excellent credit score but an average one. With FHA, there are various options available depending on what you and your lender decide on.
This loan is backed by the Federal Housing Administration (FHA), and mortgage insurance is available for the life of the loan. They’re meant for borrowers who are unable to be approved for a conventional loan because they do not meet the requirements. Many times, first-time homebuyers opt for an FHA loan instead of a conventional one.
VA loans, just like all the loans mentioned above, are not for everyone. They are for reservists, active-duty military members, and veterans. VA loans are backed by the Veteran’s Administration.
This loan requires a credit score of about 620 (can vary depending on the lender). It does not require any down payment.
A USDA loan is another of the types of mortgage loans available in 2022. This loan is backed by the US Department of Agriculture.
It is meant to assist low-to-moderate income borrowers to become homeowners as it also encourages the development of rural areas.
The credit score requirement is usually around 620 to 640+. No down payment is required but a certain income limit must be met for you to be deemed eligible. PMI is required.
Jumbo mortgage loans
This is another of the types of mortgage loans available. Jumbo mortgage loans are bigger than conventional loans because they are larger than the limits set by Fannie Mae and Freddie Mac.
This means that in 2022, any and every loan that goes above $647,200 is a jumbo loan. These loans are preferably for higher-end borrowers who want to buy expensive homes in 2022.
The requirements are high of course. A down payment of about 10-20%, an excellent credit score (at least 660-700), very minimal debt, and sufficient savings
These loans are available for people who want to buy homes in 2022. We have explained them thoroughly to make it easy for you to find which you qualify for.
Buying a house in 2022?
If you’re looking at buying a house in 2022 and need further guidance about what your mortgage options are, you can contact a mortgage lender, or call Tammy Gazda at (480)-848-7173 or read more about mortgages here.
With over 20 years of sales experience in the Metro Phoenix area, Tammy is smart, knowledgable, experienced, and attentive. She has a wide real estate network, and she will put all these advantages to work on your behalf. All you have to do is give her a call.