Types of Home Loans Available For The Baltimore Area

When you’re on the hunt for a home in the Baltimore, MD, area, you want an easy, hassle-free mortgage process, whether it’s for a condominium, single-family residence, manufactured home, or even a townhouse. Equity Mortgage Lending is on a mission to provide home loans and help borrowers overcome roadblocks. Below are a few types of home loans available through us to help you find that perfect Baltimore area home.

 

One Common Home Buying Myth

Before we discuss the types of home loans available, let’s cover one of the biggest myths surrounding the home buying process. The most common misconception is that the prospective buyer needs a 20% down payment. While it’s true that you’ll need to pay private mortgage insurance if you have a down payment of less than 20%, an FHA loan allows a minimum of 3.5%. USDA and VA loans don’t require a down payment at all, which helps you stick within your budget.

 

Conventional Mortgage

This type of mortgage is available through private lenders such as credit unions, mortgage companies, and banks and isn’t usually secured through the government. There are currently two government-sponsored mortgage enterprises: Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae). Conventional mortgages tend to have higher interest rates than FHA loans and require the borrower to complete an official mortgage application. A conventional mortgage loan often requires a 20% down payment, but some lenders do accept less as long as the applicant takes out private mortgage insurance until they achieve 20% equity.

 

FHA Loans

FHA loans are an attractive option for potential homebuyers as it accepts lower minimum credit score limits and a low down payment option. Potential homeowners can still qualify even if they have a history of financial issues, such as bankruptcy, and they can have the closing costs rolled into the loan. The Federal Housing Administration insures FHA loans, which protects the lender from defaults. Although FHA loans allow a lower down payment, the potential homebuyer will still have to pay mortgage insurance.

 

USDA Loans

USDA loans are an excellent option for households with low or moderate incomes to buy a house, as long as that single-family house is located in a rural or suburban area outside the city limits of a metropolitan center. A USDA loan doesn’t require a down payment, and you can borrow 100% of the appraised value. One thing to remember is that the USDA backs the loans, but it isn’t the one that provides the loan. Other pros of USDA loans include:

  • You can build or rehabilitate a home if you want

  • You can finance repairs and closing costs into the loan

  • The seller can pay closing costs

 

VA Loans

If you’re a veteran, a current service member, or an eligible surviving spouse, a VA loan helps you buy, repair, build, or retain a home through a private lender. One of the most exciting benefits of a VA home loan is that there’s no down payment required, and you don’t need private mortgage insurance if you go with no down payment. Other exciting benefits include low-interest rates, and the VA home loan is a lifetime benefit.

 

To learn more about our mortgage plans, call us directly at 1-800-332-9221 or contact us via our website.

 


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.