Different Home Loan Options in Texas 2 (1) (1) .pdf
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Different Home Loan Options
There are several home loan options available for borrowers who want to purchase a residential
property in Texas. Since there are so many choices available in the market, choosing the right
home loan option can be a daunting task. Seeking an expert’s assistance is, therefore, advisable
when making such a big investment. However, before seeking an expert’s assistance, borrowers
must at least have the basic knowledge of the different home loans available for them. Taking
this conversation further, in this blog post we briefly introduce you to the different types of home
loans available in the US.
VA loan is exclusively a veteran’s home loan as it is only for veterans, active duty officers and
spouses of veterans (under special circumstances). The benefit of VA loan is that it has no down
payment or monthly insurance premium. It also has one time VA funding fee, which can be
financed into the loan.
Federal Housing Administration or FHA loan is for all citizens of US. This type of home loan is
not just for purchasing a property but also for home maintenance. The FHA home loans are
further categorized into different loan programs that caters the needs of senior citizens, first-time
home buyers, and others.This type of home loan has a low down payment requirement and
requires the borrowers to pay mortgage insurance up front for every month.
Conventional loan is another home loan option that borrowers may consider to choose.
Unlike FHA, VA, or USDA loans, the conventional loans are not insured by the federal
government. The down payment of this type of loan is usually five percent. As compared to
government subsidized loan types, these types of loans require higher credit scores and debt-toincome ratios. Regarding the condition of the home, conventional loans do not have restrictive
requirements whereas FHA and VA loans have.
USDA loans are supported by the United States Department of Agriculture. It is part of the
USDA loan program or USDA Rural Development Guaranteed Housing Loan Program. This
type of loan is available for citizens with little income who wish to buy a house or property in a
rural area. Similar to the VA loan, this loan also has zero percent down payment and competitive
These were the different types of home loan options for borrowers. Out of the list, VA loan is a
more preferred option for borrowers as it is more profitable to them. The loan is not only
beneficial for buying a new property but also for refinancing the existing property. The loan does
not require a down payment and also has a low credit score requirement. When making an
investment as big as purchasing a home, it is advisable to seek an expert assistance to make an