Conventional
A conventional loan is a mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), Farmers Home Administration (aka, USDA) and Department of Veterans Affairs (VA).
Conventional loans offer flexibility with down payments as low as 3% for first-time homebuyers and 5% for repeat buyers. When you put 20% down, you can avoid Private Mortgage Insurance (PMI). Once you reach 78% loan-to-value (LTV) on your primary residence, PMI can be removed, making this a cost-effective choice for those with good credit.
FHA
Designed for low-to-moderate income borrowers who might not qualify for a conventional loan, FHA loans are backed by the Federal Housing Administration and require a minimum down payment of 3.5%.
These loans are particularly appealing due to their lower credit score requirements and the inclusion of the upfront mortgage insurance premium in addition to the monthly mortgage insurance.
VA (Active Military & Veterans)
Exclusively for veterans, active-duty service members, and certain members of the National Guard and Reserves, VA loans are guaranteed by the U.S. Department of Veterans Affairs. These loans offer significant benefits, including no down payment, no monthly mortgage insurance, and limited closing costs.
The upfront VA funding fee, which varies based on service type and down payment amount, can also be financed into the loan amount. VA loans are an excellent option for eligible veterans looking for the lowest mortgage rates in Dover NH.
USDA
Ideal for homebuyers looking to purchase in rural and certain suburban areas, USDA loans are backed by the United States Department of Agriculture. These loans offer no down payment, reduced mortgage insurance, and below-market mortgage rates.
To qualify, the property must be located in an eligible area and household income must not exceed set thresholds, which vary by county and family size.
