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🎥 4 Loan Types to Buy a House with Less Than 3.5% Down 🏡
In today's video, I'm breaking down four loan options that allow you to buy a house with less than 3.5% down. We'll cover FHA, Conventional, VA, and USDA loans, highlighting the pros, cons, and what you need to know to get started.
0:21 FHA Loan:
The FHA loan is a government-backed option ideal for first-time homebuyers or those with lower credit scores. With a minimum down payment of 3.5% and a minimum credit score requirement of 580, it's accessible to many. However, keep in mind that if your score is closer to 580, you'll face higher interest rates. FHA loans also come with mortgage insurance premiums (MIP) that last for the life of the loan, and the property must meet certain condition standards.
2:01 Conventional Loan:
Conventional loans are not government-backed, but they allow for as little as 3% down if you have good credit (typically 620+). These loans are more flexible and can be used for a variety of property types. However, they require private mortgage insurance (PMI) if your down payment is less than 20%. The good news is that PMI can be removed once you reach 20% equity in your home.
3:12 VA Loan:
For active-duty and retired military personnel, the VA loan offers 0% down payment with no mortgage insurance. The interest rates are often better than other loan types, making it a fantastic option for those who qualify. However, VA loans require the property to be in good condition, with strict guidelines around issues like termites, mold, and roof leaks.
4:11 USDA Loan:
USDA loans are designed for homes in rural areas and offer 0% down payment. This loan is backed by the U.S. Department of Agriculture and is a great option if your property is eligible. The downside is that USDA loans have strict income limits and debt-to-income ratios, making them harder to qualify for. Like FHA loans, USDA loans also come with mortgage insurance, which lasts for the life of the loan.
Final Thoughts:
If you're thinking about buying a house, it's crucial to start planning now. Each loan type has its benefits and drawbacks, so understanding your options is key to making the best decision. I hope you found this video helpful-consider subscribing for more tips and advice, and I'll see you in the next one!
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12 сен 2024
