Conventional, also called traditional loans. These are loans where the people have a minimum of 5% down. They generally have better established credit. Usually when someone comes to me and the first question I’ll ask is, “How much do you want to put down?” Then that will dictate where we go from there. Generally, in a nutshell, conventional loans are going to be your 30-year fixed rate, 20-year fixed rate, 15-year fixed rate loan with a minimum of 5% down payment and good to excellent credit.
The next loan that we see a lot. A lot of first-time home buyers use this product. Well, that’s going to be FHA’s. It stands for Federal Housing Administration. That loan has a minimum of, a little bit less down than conventional. 3.5% is the minimum down for that. It’s more lenient when it comes to credit and income qualifying. It’s better for that person that maybe, doesn’t have that established credit. Or maybe has had some credit issues in the past. That will be a product that we consider for that person.
We’re getting into some specialty products. The VA, that stands for Veterans Administration. I mean, obviously, that’s going to be a loan where, if you’re a veteran or active duty service member. If you have two years of active duty service, you’re going to qualify for that type of loan. That’s a great loan. It’s a no-money-down loan. There’s no monthly mortgage insurance. We definitely are going to look at that option for veterans or active duty service members if they qualify for that.
Another type of specialty loan is USDA. US Department of Agriculture. It’s a geographically-restricted loan, and income-restricted loan. You’re not going to be able to make over a certain amount of money and qualify for that loan. It’s usually right around median income for the particular county. Then, it’s more for rural areas, but there’s a lot of areas in St. Johns County, Clay County that actually qualify for a USDA loan. The USDA loan is a no-money-down loan. It’s very minimum mortgage insurance. It’s a good option if you make under the limit, the income limit and you’re looking for a property in that specific area. That geographic area that qualifies.
Then, one of the last ones in our specialty type of loans. A Reverse Mortgage. It’s for senior, 61 years or older, that have equity in their property. They don’t want to make a mortgage payment at all. What we can do with the reverse mortgage is, actually they don’t have to make a mortgage payment anymore. You still have to pay your taxes and insurances, but basically eliminates the mortgage payment. If they have one, or it provides them money out or a line of credit against that equity they have. They do not have to make a mortgage payment on that, as long as they occupy the property. That’s a loan that’s also under the Federal Housing Administration.