The biggest difference between USDA loans and conventional mortgages is that USDA loans typically have lower interest rates because the government insures them. The best provider of USDA loans is CrossCountry Mortgage.

Dreaming of wide open spaces? Curious about the best way to finance that country home? There are multiple options at your disposal with varying closing costs, payment requirements, loan options and much more.

Take a look at our guide to compare two options for rural home loans: USDA vs. conventional mortgages. Yes, your monthly mortgage payment might turn out roughly the same, but how do these types of loans differ, and what is the mortgage broker really offering you? You’ll also be looking at loan terms, private mortgage insurance, property taxes, etc. How do these loans differ when it comes to your monthly mortgage payment? Are fixed-rate or adjustable-rate mortgages a better option?

What Is a USDA Mortgage?

A USDA mortgage is a home loan insured by the Department of Agriculture (USDA). It can be used to buy a home in a designated rural area. Although it might sound like eligible homes are far from urban life, some areas are just a short drive from a city. While these loans are still used for single-family homes, they can greatly improve your financial situation irrespective of the circumstance.

USDA mortgages are offered through private lenders approved by the USDA. USDA loans don’t require a down payment. The only other loan type that doesn’t require a down payment is a VA mortgage, which is a home loan insured by the Department of Veterans Affairs. Remember, the housing market waits for no one, and you want to be prepared, understanding which loan is right for you when you start shopping. The application process may vary.

USDA Loan Requirements

The requirements for a USDA loan include:

• Income: USDA loans have income limits. You must make 115% of the median household income in your area or less. You can check the median income for your area on the USDA website. 
• Citizenship: You must be a U.S. citizen, a U.S. non-citizen national or a qualified alien.
• Residency: You must live in the home as your primary residence. You can’t use a USDA loan to buy a 2nd home or an investment property. 
• Location: You must buy a home in a designated area. You can look up the addresses of potential homes on the USDA website. 
• Credit: While the USDA doesn’t have a minimum credit score requirement, many lenders do. Lenders vary when it comes to their minimum credit score requirements, but many require a 620 or higher. 
• Federal programs: You must be in good standing with any federal programs like student loans. 
• Ability to repay: USDA loans look at 2 factors to determine your ability to repay the loan. Lenders look at your potential monthly house payment, which can’t be more than 29% of your monthly income. Lenders also look at your total debt payments, including your potential home loan payment. If your total debt payments are more than 41% of your income, you need to have compensating factors like savings or a credit score of 680 or higher. 

USDA Pros and Cons

What are the advantages and disadvantages of a USDA loan? Let’s take a look. 

Pros

• No down payment: It’s hard to understate how big a savings this is. Other types of home loans require a down payment of 3% or more (usually more), which adds up to thousands of dollars. No down payment allows you to put that money toward other expenses, like moving, furnishing your home or maintaining an emergency fund. 
• No mortgage insurance: If you make a down payment of less than 20% on a conventional loan, you need to pay for mortgage insurance. This insurance protects the lender if the borrower stops making mortgage payments. USDA loans don’t have mortgage insurance. There is a fee for the loan to pay for the USDA loan program, but that can be rolled into the cost of the loan. 
• Can be used to build a home: You can use a USDA loan to buy and prepare a lot and build a home from the ground up. 
• You can refinance: USDA loans have a streamlined refinancing option, which means you don’t have to get an appraisal, and you can adjust your loan term as needed.

Cons

• Income limits: If you make more than the income limit, you can’t take out a USDA loan. The income limits are in place because the program is designed to help low- and moderate-income households purchase a home.  
• Location limits: You have to purchase a home in a designated area. If you’re attached to city life, a USDA loan might not be for you. 
• Primary residence: If you’re looking for a 2nd home in the country, a USDA loan won’t work. You must use the loan for a primary residence. 

The Best USDA Mortgage Lenders

As with any home loan, it’s best to get quotes from multiple lenders so you can compare mortgage rates. Here are Benzinga’s picks for the best USDA lenders. Remember, your real estate agent can only make so many recommendations for government-backed mortgages. Do your research, save for the down payment, look into adjustable rates and fixed-rate loans and search for the home of your dreams.

Best For

Personalized support

Minimum Credit Score

620

get started

More Details

Avg. Days to Close Loan

28 – 32

Minimum Credit Score

620

1 Minute Review

No matter where you live in the U.S., you can use Rate’s services. It has an online application that could get you a mortgage loan in just a day. As of Feb. 13, 2025, Rate says that the national mortgage rate is 6.905% for a 30-year fixed loan, 6.217% for a 15-year fixed loan, 6.552% for a Federal Housing Administration (FHA) loan and 6.47% for a United States Department of Veterans Affairs (VA) loan.

Best For

• All online process
• Low down payment options
• Conventional, FHA and VA loans available

Pros

• Approval in as little as 24 hours
• Online application process
• Available in all 50 states and Washington, D.C.
• Hundreds of branches across the country
• Posts rates online

Cons

• A 620 credit score is generally needed for every loan type
• Some higher fees than other lenders
• No United States Department of Agriculture (USDA) loans

Best For

Best for Fast Approvals

Minimum Credit Score

650

get started

More Details

Avg. Days to Close Loan

Depends on Lender

Minimum Credit Score

650

1 Minute Review

eMortgage bills itself as a fast and easy mortgage lender that offers you both purchase and refinancing options. Moreover, you get more out of eMortgage because the lender makes it easy for you to understand the rates you might get, refinance your mortgage with flexible rates, jumbo loans, reverse mortgages, non-QM loans, refinancing and more.

Best For

Pros

Cons

What Is a Conventional Mortgage?

A conventional mortgage is a mortgage that’s not part of a government program. That means these loans aren’t directly insured by a federal agency. This gives lenders a lot of latitude when it comes to who can qualify for the loan. 

Conventional loans come in two varieties: conforming and non-conforming. Remember, there are other types of loans, like investment portfolios or jumbo loans. But at the end of the day, they are either conforming or non-conforming loan types.

Conforming loans meet the requirements of Freddie Mac and Fannie Mae. These 2 private companies were started by the federal government and follow rules set by the government. They’re known as government-backed loan enterprises. 

Fannie Mae and Freddie Mac help to stabilize the mortgage market. They promise to buy loans that meet specific requirements. This encourages lenders to make more loans since there’s not as much risk for them. 

Non-conforming loans don’t meet the requirements of these companies. Lenders have a lot more flexibility when it comes to how these loans are structured, including origination fees, titling, closing costs and more.

Conventional Loan Requirements

What are the requirements for a conventional loan? They vary by lender and by whether it’s a conforming or non-conforming loan. Even so, the application process tends to be the same.

Conforming Loan Requirements

• Loan limits: Conforming loans have limits. The Federal Housing Finance Agency (FHFA) sets these limits each year. In 2020, the maximum for many areas of the country is $510,400 for a 1-unit property.
  Some areas of the country have higher home prices, so they also have higher loan limits. The highest a home loan can be in a high-cost area is $765,600. You can see a map with loan limits on the FHFA website. 
• Credit score: You need a credit score of 620 or higher to qualify for a conforming loan. 
• Debt-to-income (DTI) ratio: Your DTI ratio is your gross (pre-tax) income compared to your monthly debt payments, including your potential mortgage payment.
  If you make $4,000 per month before taxes and your home, car, credit card and student loan payments add up to $1,700 per month, you have a DTI ratio of 42.5%. You could qualify for a conforming loan with this DTI, as Freddie Mac and Fannie Mae require a DTI of 50% or less. 
• Down payment: You must make a down payment with a conforming loan. Exactly how much varies. If you’re a first-time home buyer, you may be able to make a down payment of 3%. If you’re not, you may be able to make a down payment of 5% or more. 

Non-Conforming Loan Requirements

Non-conforming loans aren’t standardized and don’t have set requirements. Lenders set the requirements for these mortgages. Some may be easier to qualify for than conforming loans, while others may have more stringent requirements. 

Because these loans aren’t standardized, it’s important to review the terms of these loans carefully to make sure you understand the terms. 

Conventional Pros and Cons

Is a conventional loan right for you? Let’s look at the benefits and drawbacks. 

Pros

• Can be used for 2nd homes and investment properties: Conventional mortgages can be used for a wide range of properties. You don’t have to live in the property full-time, so it’s a good choice for a vacation home or for a home you plan to rent out.  
• Can be used anywhere: Unlike a USDA loan, there are no limitations when it comes to where you can buy a home with a conventional mortgage. 
• No income limitations: There’s no cap on the amount of income you can earn and qualify for a conventional loan. Lenders want to ensure you make enough to cover the cost of the loan, but there’s no maximum income limit as with a USDA loan. 

Cons

• Private mortgage insurance (PMI): As mentioned previously, if you make a down payment of less than 20%, you will need to pay for PMI. This insurance is different from homeowners insurance, which you’ll also need. PMI protects the lender if the borrower stops paying on a mortgage. You can ask your lender to cancel PMI once your loan balance is less than 80% of the home’s value. 
• Down payments: The amount of your down payment varies depending on the lender and whether it’s a conforming loan. Either way, you need to plan on a down payment. 

The Best Conventional Mortgage Lenders

Take the time to compare conventional mortgage lenders so you find the best rate. Here are Benzinga’s top picks. 

Best For

Online Mortgages

Minimum Credit Score

580

Get started securely through Rocket Mortgage (formerly Quicken Loans)’s website

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Rocket Mortgage (formerly known as Quicken Loans) is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.

Best For

• Homebuyers who are looking to complete the mortgage application process on their own
• Homebuyers who have found their dream home and are looking to move through the approval process quickly
• Homebuyers with good credit scores looking to review their mortgage options
• Current homeowners looking to refinance within the next few months

Pros

• Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
• You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
• RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
• The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
• The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process

Cons

• While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
• You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for

Choose the Right Lender

Choosing the right lender is a challenge. It’s important to take your time and check out a few options. A good lender will help you determine which mortgage option is the best for you, whether it’s a USDA loan, a conventional mortgage or something else. 

Keep in mind the lender’s service options. Does it offer an online mortgage process? Can you connect your bank accounts and upload documents? Can you talk to someone easily if you have questions? Customer service is an important part of choosing a lender. 

When you compare mortgage rates, look at more than just the interest rate. Keep in mind any fees or discounts, which can increase or decrease your costs. Look at how long the mortgage will last and whether the interest rate will stay the same. With some loans, the lender can change the rate down the road, which means your monthly payments can change too. 

Start with our recommended lenders to find the right mortgage today, irrespective of the type of loan that you thought you needed. Prepare for the closing costs involved, primary mortgage insurance, property taxes and more. You can get into the house you want most, and there might be more loan options than you thought.

Frequently Asked Questions

The post USDA Loan vs. Conventional Mortgage by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

Benzinga readers often choose Rocket Mortgage as the best mortgage lender.

There’s no place quite like Florida. With its mild winters, miles of beaches and unique attractions like Walt Disney World, the Sunshine State has a little something for everyone. As a first-time homebuyer, Florida has a variety of homes and lenders to choose from. Let’s take a closer look at the best Florida lenders for first-time homebuyers.

Quick Look: Best Mortgage Lenders for First Time Home Buyers in FL

• Best for Online Loans: Rocket Mortgage® (formerly Quicken Loans)
• Best for Self-Employed: CrossCountry Mortgage
• Best for VA Loans: Veterans United
• Best for Comparing Lenders: loanDepot

4 Best Mortgage Lenders in Florida for First Time Home Buyers

You should get quotes from multiple lenders to ensure you get the best rates. To help you get started, here are the best mortgage companies in Florida for first-time buyers, all of which have been researched extensively by Benzinga.

1. Best for Online Loans: Rocket Mortgage® (formerly Quicken Loans)

Best For

Online Mortgages

Minimum Credit Score

580

Get started securely through Rocket Mortgage (formerly Quicken Loans)’s website

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Rocket Mortgage (formerly known as Quicken Loans) is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.

Best For

• Homebuyers who are looking to complete the mortgage application process on their own
• Homebuyers who have found their dream home and are looking to move through the approval process quickly
• Homebuyers with good credit scores looking to review their mortgage options
• Current homeowners looking to refinance within the next few months

Pros

• Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
• You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
• RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
• The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
• The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process

Cons

• While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
• You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for

Rocket Mortgage (formerly known as Quicken Loans) is great for first time buyers, It offers an intuitive and easy online application process for quick preapprovals.

The Quicken Loans website also offers resources such as mortgage loan calculators to help you sort through mortgage options.

If you have questions, Quicken Loans has a highly reputed customer support team to assist you.

• Loan types offered: Conventional, FHA, USDA and VA
• Credit score requirement: 620
• Average days to close a loan: 30-45 days

2. Best for Self-Employed: CrossCountry Mortgage

Best For

Self-employed Borrowers

Minimum Credit Score

620

get started securely through CrossCountry Mortgage’s website

More Details

Disclosure: Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA 

Avg. Days to Close Loan

30 – 40

Minimum Credit Score

620

1 Minute Review

CrossCountry Mortgage was started in 2003 by Ronald Leonhardt Jr., founder and CEO. Its headquarters is located in Cleveland, Ohio, but it’s licensed in all 50 states, D.C. and Puerto Rico, and it has over 700 branch locations across the country. Hopeful homeowners turn to CrossCountry Mortgage for its diverse portfolio of loan options, including conventional loans, Federal Housing Administration (FHA) loans, United States Department of Veterans Affairs (VA) loans and United States Department of Agriculture (USDA) loans.

 

Best For

• Self-employed professionals
• Retirees
• Investors
• Condo buyers

Pros

• Provides loans across all 50 states, D.C. and Puerto Rico
• 120 mortgage purchase, refinance and home equity solutions
• Can work with credit scores as low as 500
• Tax returns aren’t required
• Ideal for first-time homebuyers

Cons

• Doesn’t post rates online
• Underwriting process may take longer

CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible home payment plans with their 40-year loan program.

It’s also easier to get approved if you’re self-employed. Tax returns are not required and you’ll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.

• Loan types offered: Conventional, FHA, USDA and VA
• Credit score requirement: 580
• Average days to close a loan: 21

3. Best for VA Loans: Veterans United

Best For

Current Service Members

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

620

1 Minute Review

Veterans United focuses on VA Loans, which are government-backed loans guaranteed by the U.S. Department of Veterans Affairs to help veterans and active-duty servicemembers buy homes. Veterans United is licensed in all 50 states and the District of Columbia and is the top VA lender in the country. If you’re currently serving or if you’re a veteran, Veterans United is worth considering due to its outstanding customer service and range of mortgage options.

Veterans United’s advisors come from each military branch to ensure it’s taking care of its clients. You can visit its website to learn more about VA loans and the homebuyer process in general and its Lighthouse Program can help you get ready to buy if you’re not quite there yet. It offers strong support if you’ve served our country.

“Nobody handles VA loans better than Veterans United,” says real estate investor Sergio Aguinaga, owner and founder of Michigan Houses for Cash. “Their process is smooth, the support is great and they truly get military buyers. But, of course, the con is that they are only for veterans.”

Best For

• Current service members
• Veterans
• First-time home buyers

Pros

• 24/7 customer service
• Offers VA purchase and refinance loans
• Offers credit consulting through its Lighthouse Program
• Staff from every military branch

Cons

• Only has branches in only 18 states
• Must be a veteran to qualify

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

• Loan types offered: VA, USDA, FHA and Jumbo
• Minimum credit score: 620
• Average days to close a loan: 30

4. Best for Comparing Lenders: loanDepot

Best For

Comparing Lenders

Minimum Credit Score

620

Compare Lenders

More Details

Avg. Days to Close Loan

15

Minimum Credit Score

620

1 Minute Review

Loandepot is a clearinghouse for anyone to get a competitive loan quote and preapproval. There are several partners on the site who can provide  loans to consumers with a range of rates and terms available based on your credit rating.

Best For

• Comparing lenders
• Lots of information on the partners on the site
• Quality interface

Pros

• Apply quickly
• Get competitive rates
• Choose the loan that works best for your situation

Cons

• Not all partners can give you the best rates

loanDepot is a non-bank lender that gives you convenience and efficiency online with the option to visit one or over 200 branches across the country. loanDepot offers fixed-rate and adjustable-rate conventional mortgages. You could also secure jumbo, FHA or VA loans, although conventional loans made up most of LoanDepot’s mortgage originations last year. LoanDepot also offers 10-, 15-, 20- and 30-year mortgage terms. 

In addition to mortgages and home refinancing, LoanDepot offers free credit score monitoring to help you prepare to apply for a mortgage. You’ll need at least 5% downpayment. 

loanDepot is a non-bank lender that gives you convenience and efficiency online with the option to visit one or over 200 branches across the country. loanDepot offers fixed-rate and adjustable-rate conventional mortgages. You could also secure jumbo, FHA or VA loans, although conventional loans made up most of LoanDepot’s mortgage originations last year. LoanDepot also offers 10-, 15-, 20- and 30-year mortgage terms. 

In addition to mortgages and home refinancing, LoanDepot offers free credit score monitoring to help you prepare to apply for a mortgage. You’ll need at least 5% downpayment. 

• Loan types offered: Conventional, FHA, VA, and Jumbo
• Credit score requirement: 620 (depends on the lender)
• Average days to close a loan: 30 days (depends on the lender)

The Housing Market in Florida: An Overview

Getting a sense of the Florida housing market can help you know what to expect when you start shopping for a home. Different cities, and even different neighborhoods within a city, will have different price points, so keep that in mind as you look for your new home. 

Here’s some quick Florida facts: 

Total households: 8,353,441

Median list price: $427,467

3 most expensive cities in Florida to buy a house:

• Jupiter Island: $9,691,748
• Golden Beach: $7,326,400
• Fisher Island: $5,975,448

3 most affordable cities in Florida to buy a house:

• Altamonte Springs: $198,500
• Callahan: $275,100
• DeBary: $270,500

Preparing for a Mortgage

The mortgage process may seem mysterious. You can help keep the process moving by being prepared. Here’s how the process works:

1. Review Your Credit

Your credit history and credit score play a significant role in the mortgage process. Lenders have a minimum credit score requirement. If you don’t meet the minimum, you may need to improve before you can qualify for a mortgage. Before you apply for a mortgage, get a free copy of your credit reports. Review it for errors and areas for improvement.

2. Gather Your Documents

You can simplify things by having all your documents ready before you apply. Every lender will have different requirements, but in general, you will need to provide the following documents:

• W2s for the past year
• Tax returns for the past 2 years
• Pay stubs from the past 2 months
• Bank statements from the past 2 months
• Investment and retirement account statements from the past 2 months
• The most recent statement for all your debt payments 
• A copy of your driver’s license

3. Get pre-approved

Contact lenders and let them know you’re starting your home search process. Ask for a quote. Review the quotes and choose a lender and complete the lender’s preapproval process.  

4. Find a Home

An experienced real estate agent can help you find a home that fits your budget. Base your budget on how much your lender preapproved for you. 

5. Make an Offer

You need to determine the price you are willing to pay. Once you have decided on an offer price, you will submit a written offer through your real estate agent to the seller.

6. Complete a Loan Application

Your lender will have you complete an application. The lender’s underwriting department will review your application. 

7. Complete Underwriting

Your lender may ask questions or need additional documents during underwriting. Provide documents promptly to keep things moving. Your lender will let you know if it has approved you at the end of underwriting. 

8. Close on Your Home

You will need to sign documents and pay your closing costs. After that, you can move into your new home. 

Everyone runs into bumps during the mortgage process, so don’t panic. Respond to your lender promptly and ask questions if you need clarification. Here are the minimum credit scores required by some Florida lenders:

Mortgage Options

As a first-time homebuyer, you’ll have several mortgage options to choose from when you get a purchase quote. Here’s a closer look at the most common mortgage options:

Conventional Loans

A conventional mortgage is a mortgage that is not insured by a federal government agency. These mortgages typically require a higher credit score than FHA, USDA and VA mortgages. Mortgages can be fixed-rate, where the interest rate stays the same for the entire loan term, or adjustable-rate, where an interest rate changes on a schedule established by your lender. Adjustable-rate mortgages often have an introductory fixed-rate period. 

FHA Loans

You can get an FHA mortgage through an FHA-approved lender. The Federal Housing Administration insures these loans, which lenders can offer to a wider range of home buyers. If you have a credit score of 580 or higher, you can make a down payment as low as 3.5%. If your credit score is 500–579, you may still qualify for an FHA mortgage if you make a 10% down payment. 

USDA Loans

The U.S. Department of Agriculture backs loans to help low- to moderate-income borrowers purchase homes in rural areas, including many areas of Florida. These mortgages are available with no minimum down payment.

VA Loans

The Veterans Administration backs VA loans. Current service members and veterans, along with some qualifying spouses, can obtain a low-interest mortgage with no minimum down payment. You have to meet the VA’s minimum service requirements to qualify. 

Jumbo Loans

A jumbo mortgage is a type of conventional mortgage for higher-priced properties. Some conventional mortgages are conforming, which means Fannie Mae and Freddie Mac guarantee them. These organizations are government-sponsored but are private companies. Conforming conventional mortgages have limits set by the FHA. Jumbo mortgages are non-conforming, which means they are higher than the conforming limits. 

The bottom line is that FHA, USDA and VA mortgages are all insured by government agencies but offered through private, approved lenders. Private lenders offer conventional and jumbo mortgages. 

First-Time Home Buyer Programs in Florida

Buying your first home isn’t easy. It can be a challenge to come up with that initial down payment and the process can seem like a mystery. Florida offers programs that can help:  

Florida Housing First Time Homebuyer Program

This program offers 30-year fixed-rate mortgages to first-time home buyers who qualify based on income. To find out if you qualify, Florida Housing recommends you contact an approved lender. You can find one in your area by visiting its website. 

Florida Housing Down Payment Assistance

Florida Housing offers down payment and closing cost assistance in the form of a 2nd mortgage. This assistance is only available in conjunction with a Florida Housing mortgage. 

Florida Housing Mortgage Credit Certificate

First-time home buyers may also be eligible for a tax credit. The credit is based on a percentage of the mortgage interest you pay up to a limit of $2,000. This credit directly lowers the amount of federal taxes you owe. To qualify, you must meet purchase price and income requirements, which you can find out by talking to an approved lender. 

Current Mortgage Rates in Florida

Florida mortgage rates, the amount of interest you pay on your mortgage, are currently slightly lower than the national average rates. 

Mortgage rates change daily based on market conditions. At Benzinga, we update mortgage rates regularly to reflect these changes. Here are the mortgage rates for common types of mortgages:

Closing a Mortgage

As you consider the best lenders for first-time buyers, keep an eye on their closing rate. Closing is when you’ve reached the end of the mortgage process. At that point, your lender has approved your loan, the appraisal is done and your lender is ready to fund your loan.

All you need to do is sign the paperwork and get the keys. Some lenders handle this process more quickly than others. Here are the average closing rates from popular Florida lenders. 

Finding Your First Florida Home

Although the home-buying process can feel rushed, take the time to evaluate your options. Sure, you can get a refinance quote down the road if you need to, but find the best mortgage you can by contacting multiple lenders. Even a small difference in interest rates can save you thousands of dollars over the life of your mortgage.

The same goes for real estate agents — you may need to interview more than one before you find the right one. Take your time and trust your instincts, and you’ll find the home that’s right for you.

Frequently Asked Questions

The post Best Florida Mortgage Lenders for First Time Home Buyers by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

Jump straight to it: The best Tennessee mortgage lender for first time home buyers is CrossCountry Mortgage.

Tennessee’s southern charm, gorgeous mountains and legendary music scene make the Volunteer State a great place to call home. Tennessee offers lower-than-average home prices which can be a major attraction for first-time home buyers. Here’s everything you need to know about buying a home in Tennessee. 

Quick Look: Best Mortgage Lenders for First Time Home Buyers in TN

• Best for Self-Employed Home Buyers: CrossCountry Mortgage
• Best for Online Service: Rocket Mortgage®
• Best for Credit Monitoring: loanDepot
• Best for In-Person Services: Bank of America
• Best for Lender Comparison: Credible Mortgage
• Best for VA Loans: Veterans United

6 Best Mortgage Lenders in TN for First Time Home Buyers

Ready to find your lender? Here are the best mortgage companies for first time home buyers in Tennessee.

1. Best for Self-Employed: CrossCountry Mortgage

Best For

Self-employed Borrowers

Minimum Credit Score

620

get started securely through CrossCountry Mortgage’s website

More Details

Disclosure: Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA 

Avg. Days to Close Loan

30 – 40

Minimum Credit Score

620

1 Minute Review

CrossCountry Mortgage was started in 2003 by Ronald Leonhardt Jr., founder and CEO. Its headquarters is located in Cleveland, Ohio, but it’s licensed in all 50 states, D.C. and Puerto Rico, and it has over 700 branch locations across the country. Hopeful homeowners turn to CrossCountry Mortgage for its diverse portfolio of loan options, including conventional loans, Federal Housing Administration (FHA) loans, United States Department of Veterans Affairs (VA) loans and United States Department of Agriculture (USDA) loans.

 

Best For

• Self-employed professionals
• Retirees
• Investors
• Condo buyers

Pros

• Provides loans across all 50 states, D.C. and Puerto Rico
• 120 mortgage purchase, refinance and home equity solutions
• Can work with credit scores as low as 500
• Tax returns aren’t required
• Ideal for first-time homebuyers

Cons

• Doesn’t post rates online
• Underwriting process may take longer

If you’re a small business owner or a freelancer, your income likely fluctuates from year to year. This can make getting a mortgage more difficult, as lenders usually want to see proof of consistent income before they’ll offer you a loan. CrossCountry Mortgage’s Asset Qualifier loan is an excellent choice for self-employed men and women.

When you apply for an Asset Qualifier loan, CrossCountry Mortgage will look at the sum of your business assets — not just your income — when they underwrite your loan. This can make it easier to qualify if you’ve recently invested a large amount of money into your business or if you’re in the middle of a slow sales year. 

Loan types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

Average days to close a loan: 21

2. Best for Online Service: Rocket Mortgage®

Best For

Online Mortgages

Minimum Credit Score

580

Get started securely through Rocket Mortgage (formerly Quicken Loans)’s website

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Rocket Mortgage (formerly known as Quicken Loans) is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.

Best For

• Homebuyers who are looking to complete the mortgage application process on their own
• Homebuyers who have found their dream home and are looking to move through the approval process quickly
• Homebuyers with good credit scores looking to review their mortgage options
• Current homeowners looking to refinance within the next few months

Pros

• Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
• You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
• RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
• The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
• The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process

Cons

• While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
• You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for

The mortgage process is complicated, so Rocket Mortgage® simplifies it.

The lender offers an online, easy-to-complete application. It also offers top-notch customer service before and after you qualify for a mortgage. Rocket Mortgage® doesn’t have branches, but you can easily reach a loan expert by phone or chat.

Loan types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

Average days to close a loan: 30-45 days

3. Best for Credit Monitoring: loanDepot

Best For

Comparing Lenders

Minimum Credit Score

620

Compare Lenders

More Details

Avg. Days to Close Loan

15

Minimum Credit Score

620

1 Minute Review

Loandepot is a clearinghouse for anyone to get a competitive loan quote and preapproval. There are several partners on the site who can provide  loans to consumers with a range of rates and terms available based on your credit rating.

Best For

• Comparing lenders
• Lots of information on the partners on the site
• Quality interface

Pros

• Apply quickly
• Get competitive rates
• Choose the loan that works best for your situation

Cons

• Not all partners can give you the best rates

loanDepot is a non-bank lender that gives you convenience and efficiency online with the option to visit one or over 200 branches across the country. loanDepot offers fixed-rate and adjustable-rate conventional mortgages. You could also secure jumbo, FHA or VA loans, although conventional loans made up most of LoanDepot’s mortgage originations last year. LoanDepot also offers 10-, 15-, 20- and 30-year mortgage terms. 

In addition to mortgages and home refinancing, LoanDepot offers free credit score monitoring to help you prepare to apply for a mortgage. You’ll need a minimum credit score of 620 and at least 5% downpayment. 

Loan types offered: Conventional, FHA, VA and Jumbo

Credit score requirement: 620

Average days to close a loan: 30 days

4. Best for In-Person Service: Bank of America

Best For

Broad Range of Mortgage Loans

Minimum Credit Score

620

Compare Lenders

More Details

Avg. Days to Close Loan

45

Minimum Credit Score

620

1 Minute Review

Bank of America is one of the largest financial institutions in the U.S., offering a wide variety of mortgage options for first-time homebuyers, conventional borrowers, and those looking to tap into home equity. The bank stands out for its strong digital tools paired with in-person service through its nationwide branches. Bank of America’s specialized programs, like the Affordable Loan Solution and Preferred Rewards, are particularly appealing for those seeking low down payment options or discounts. While it doesn’t offer USDA loans, and its preferred rewards program is limited to those with higher balances, it’s still a solid choice for most homebuyers.

Best For

• First-time homebuyers seeking low down payment options
• Homebuyers who prefer the option of in-person support at a branch
• Existing Bank of America customers who qualify for preferred rewards
• Borrowers interested in a range of refinance options and home equity loans

Pros

• Wide range of mortgage products, including low down payment options
• Strong digital tools, including the Home Loan Navigator for tracking your loan
• Access to in-person customer service at branches across the country
• Discounts available through the Preferred Rewards program

Cons

• No USDA loans offered
• Preferred Rewards discounts require high account balances

Many first time buyers like working with someone in person. Bank of America has branches throughout Tennessee.

You can easily meet with a loan officer and talk about your mortgage options. Bank of America also offers an online application. You can view its rates to make comparison shopping easier.

Loan types offered: Conventional, FHA, VA and USDA

Credit score requirement: 620

Average days to close a loan: 30

5. Best for Lender Comparison: Credible Mortgage

Unlike individual mortgage lenders, Credible is a lender marketplace that allows you to compare multiple lenders. You’ll enter basic financial information and get quotes from several lenders on standard home mortgage products. Credible offers a free, fully online mortgage broker service that lets you get quotes from online lenders. It offers straightforward, convenient service with the possibility of finding the lowest interest rates.

Loan types offered: Conventional, FHA, VA USDA and Jumbo

Credit score requirement: 620 (depends on the lender)

Average days to close a loan: 30 – 45 (depends on the lender)

6. Best for Service Members: Veterans United

Best For

Current Service Members

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

620

1 Minute Review

Veterans United focuses on VA Loans, which are government-backed loans guaranteed by the U.S. Department of Veterans Affairs to help veterans and active-duty servicemembers buy homes. Veterans United is licensed in all 50 states and the District of Columbia and is the top VA lender in the country. If you’re currently serving or if you’re a veteran, Veterans United is worth considering due to its outstanding customer service and range of mortgage options.

Veterans United’s advisors come from each military branch to ensure it’s taking care of its clients. You can visit its website to learn more about VA loans and the homebuyer process in general and its Lighthouse Program can help you get ready to buy if you’re not quite there yet. It offers strong support if you’ve served our country.

“Nobody handles VA loans better than Veterans United,” says real estate investor Sergio Aguinaga, owner and founder of Michigan Houses for Cash. “Their process is smooth, the support is great and they truly get military buyers. But, of course, the con is that they are only for veterans.”

Best For

• Current service members
• Veterans
• First-time home buyers

Pros

• 24/7 customer service
• Offers VA purchase and refinance loans
• Offers credit consulting through its Lighthouse Program
• Staff from every military branch

Cons

• Only has branches in only 18 states
• Must be a veteran to qualify

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Loan types offered: VA, USDA, FHA and Jumbo

Minimum credit score: 620

Average days to close a loan: 30

The Housing Market in Tennessee: An Overview

Before you start your housing search, it helps to know what’s going on in the housing market. Here’s an overview of the housing market facts and figures you’ll find in Tennessee:

Total households: 2,713,635

Median list price: $306,156

3 most expensive cities in Tennessee to buy a house:

• Brentwood: $1,207,564
• Arrington: $1,116,737
• College Grover: $1,095,539

3 most affordable cities in Tennessee to buy a house:

• La Follette is $87,500 
• Johnson City is $148,800
• Clarksville is around $159,300

Preparing for a Mortgage

How do you get ready for a mortgage? What does the process look like? Let’s take a closer look at what’s involved in getting a mortgage. 

Get Ready

Here are 2 important steps you’ll need to take when as you get ready to apply for a mortgage:

Check Your Credit

Your credit doesn’t have to be perfect to get a mortgage, but take the time to check your credit report for errors. You can get 1 free credit report from each of the 3 credit bureaus each year through annualcreditreport.com. Report any errors to the credit bureau. 

Prepare an Application Packet

Gather your financial documents and store them in a secure but easy-to-find place. Here are some of the documents you’ll need to apply for a mortgage. Your lender may ask for additional documents, but these will get you off to a good start:

• A copy of your identification
• Pay stubs from the last month
• Your 2 most recent tax returns
• Your W-2s from the past 2 years
• Your 2 most recent bank statements
• Documentation of your down payment source
• Proof of any other income
• Documentation of any name changes

Neither of these steps is required, but it’s a good idea to get organized so you help the mortgage process go more smoothly. 

Next Mortgage Steps

Next, contact at least 3 lenders and get a purchase quote. Review your quotes and choose a lender and apply for preapproval. A preapproval makes you more appealing to home sellers. 

Start home shopping once you have a preapproval letter. A knowledgeable real estate agent can be a big help. A real estate agent can sort through listings and help you narrow down your options. Put in an offer when you’ve found a promising home. If the seller accepts, it’s time to make a final decision on a lender and mortgage. 

Complete a full application with your lender of choice. Your credit score is an essential part of the whole process — and lenders have specific credit score minimums. Your credit score is a computer-generated number that gives lenders an at-a-glance understanding of your credit history. Here are the minimum credit scores for some Tennessee lenders.

Mortgage Options

There are a lot of mortgage types on the market, which can lead to some confusion. But here’s a quick overview of the types of loans you may be able to find. Reading through the list may help demystify some of your options:

FHA Loans

Many first time home buyers opt for an FHA mortgage. Why? These mortgages are backed by the Federal Housing Administration. This means they have low down payment requirements and low minimum credit score requirements. If your credit score is 580 or higher, you can make a down payment as low as 3.5%. The FHA also allows borrowers with credit scores of 500–579 to qualify with a down payment of 10% or more. 

USDA Loans

USDA mortgages help borrowers with limited means obtain a mortgage. You can only use these mortgages in rural areas. If you meet the income criteria, you may not have to make a down payment. The Department of Agriculture oversees this program. 

VA Loans

VA mortgages help current and retired service members buy homes. The Department of Veterans Affairs supports and governs this program. Qualified service members may be able to get a mortgage with no down payment. These mortgages have limited fees and no mortgage insurance, which means you’ll be able to make a lower monthly payment. 

Conventional Loans

A conventional mortgage is a home loan that isn’t directly supported by a government program. You’ll see 2 types of conventional loans: conforming and non-conforming. Conforming mortgages meet Freddie Mac and Fannie Mae’s requirements. These 2 companies back conforming mortgages and help stabilize the housing market. They have a mortgage price limit, which varies depending on where you live. Non-conforming mortgages don’t meet Freddie Mac or Fannie Mae requirements. 

Jumbo Loans

A jumbo mortgage is a mortgage that exceeds Freddie Mac and Fannie Mae’s price limits. These mortgages can be $1-2 million or more. 

Private lenders offer these mortgages, including the government-sponsored ones. The backing government agency must approve lenders that offer FHA, USDA and VA mortgages. 

First Time Home Buyer Programs in Tennessee

Looking for some extra help? The Tennessee Housing Development Agency offers assistance programs. 

Great Choice Home Loans

These mortgages offer a fixed interest rate and a 30-year term. This means the interest rate will never change for the life of the loan. The program has income limits. All applicants must have a credit score of 640 or higher. 

Great Choice Plus Second Loan

Borrowers who qualify for a Great Choice Home Loan can also apply for a second loan. This loan provides up to 5% of your home’s purchase price to help with your down payment and closing costs. This is a no-interest second loan. You don’t have to make any payments on the loan until you sell or refinance the home. 

Contact a participating lender if you’re interested in Tennessee’s home buyer programs. 

Current Mortgage Rates in TN

Your mortgage rate is what you pay your lender to borrower money. Mortgage rates can be fixed or adjustable. An adjustable-rate mortgage (ARM) usually starts with an introductory fixed rate. After that, the lender changes your rate based on market conditions. This could increase or decrease your monthly payment. 

When you’re mortgage shopping, you might notice that rates change daily. Lenders change rates in response to what’s going on with the economy. At Benzinga, we update our rates frequently to reflect these changes. Here are the current mortgage rates in Tennessee:

Closing a Mortgage

Closing occurs at the end of the mortgage process. After your lender reviews and underwrites your mortgage, it lets you know whether you’re approved. If the mortgage is approved, the next step is closing. When you officially close on your mortgage, you meet with your lender and other parties. You do a lot of paperwork and pay your closing costs and down payment. 

Legally, your lender must have your documents ready 3 days before your closing meeting. If anything is confusing or unexpected, contact your lender. 

The underwriting process can be lengthy. Here are the average days to close for several Tennessee lenders: 

Choosing Your Tennessee Lender

Choosing a lender is a big decision. Sure, you can get a refinance quote down the road, but you want to start with the best terms possible. Take the time to get multiple quotes and review them carefully. Ask questions and trust your instincts. You’ll be in the right home — and have the right mortgage — in no time. 

Frequently Asked Questions

The post Best Mortgage Lenders for First Time Home Buyers in Tennessee by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

New American Funding was recognized as the premier option for top FHA lenders.

Are you struggling to save up a 20% down payment for your dream home? Or maybe you’ve heard that you should have a great credit score before you buy? Fortunately, you don’t need a big down payment or perfect credit for an FHA loan. Here’s everything you need to know about FHA loans.

Quick Look: The Best FHA Lenders

• Best for a Variety of Options: New American Funding
• Optimal for Online Loans: Rocket Mortgage (formerly Quicken Loans)
• Best for Low Credit Scores: Carrington Mortgage Services
• Best for Education: Guild Mortgage
• Best for First Time Home Buyers: Bank of America
• Best for Mobile: Fairway Independent Mortgage Corporation
• Best for Service Members: Navy Federal Credit Union

Top FHA Lenders

Where should you start your search? Here are the 8 best FHA lenders we found, all based on careful research.

1. Best for a Variety of Options: New American Funding

Best For

A Variety of Options

Minimum Credit Score

620

get started securely through New American Funding’s website

More Details

Avg. Days to Close Loan

31-40

Minimum Credit Score

620

1 Minute Review

New American Funding is a lender that offers several types of mortgages, including conventional, FHA and VA loans. It has relatively low interest rates but a limited number of term options.

Best For

• Conventional loans: This is the most popular type of mortgage. These loans usually have the lowest fees but often have stricter requirements.
• FHA loans: These loans are designed for those with fair credit or who can’t afford as much of a down payment.
• Jumbo loan: These loans have larger maximum loan amounts and are geared toward high-income borrowers.
• VA loans: Veterans and current service members are eligible for VA loans with no down payment requirement.
• Refinancing: If you have a mortgage with a high interest rate, you can refinance to get a better deal.
• Adjustable rates: An adjustable-rate mortgage is desirable for those who believe interest rates will come down soon.
• Fixed rates: Fixed-rate mortgages are popular for people who want stability in their monthly payment.

Pros

• Offers mortgage refinance as well as new loan origination. Both new homebuyers and existing homeowners can shop for a mortgage with New American Funding.
• Has low interest rates. Borrowers looking for a good rate can find one with New American Funding.
• Several types of mortgages available. A few different mortgage options are available, so you’re not stuck with one type.
• Website offers homebuying resources. New American Funding’s website includes articles and tools that help buyers understand more about the homebuying process.

Cons

• Limited local branches. The lack of a local branch can be frustrating if you prefer an in-person experience. Not available in every state.
• New American Funding does not service New York and Hawaii residents.

An FHA loan is ideal for those with less-than-perfect credit or no credit history. You’ll have the option of 30-year fixed or 15-year fixed loans with a low down payment option. To qualify for an FHA loan through New American Funding you’ll need a credit score of 580 or higher, 3.5% – 10% down depending on credit score, and proof of steady income. Along with that, mortgage insurance is required, there are higher home inspection standards and the loan will have to be used for a primary, residential property. 

New American Funding has an A+ rating with the BBB and over 236k reviews. There’s something to be said about reputation and borrower satisfaction when it comes to New American Funding. Apply today for an FHA loan.

2. Optimal for Online Loans: Rocket Mortgage (formerly Quicken Loans)

Best For

Online Mortgages

Minimum Credit Score

580

Get started securely through Rocket Mortgage (formerly Quicken Loans)’s website

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Rocket Mortgage (formerly known as Quicken Loans) is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.

Best For

• Homebuyers who are looking to complete the mortgage application process on their own
• Homebuyers who have found their dream home and are looking to move through the approval process quickly
• Homebuyers with good credit scores looking to review their mortgage options
• Current homeowners looking to refinance within the next few months

Pros

• Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
• You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
• RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
• The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
• The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process

Cons

• While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
• You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for

Rocket Mortgage (formerly known as Quicken Loans) offers digital tools backed by award-winning customer service. Its speedy processing helps borrowers get into homes sooner rather than later.

Rocket Mortgage offers low APR financing, which includes all the fees associated with a mortgage, including mortgage insurance. It also offers conventional and VA mortgages. 

3. Best for Low Credit Scores: Carrington Mortgage Services

Best For

Easy-To-Manage Mortgages

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

45 – 50

Minimum Credit Score

620

1 Minute Review

Carrington Mortgage Services is a servicer that provides. wide range of customers with the support they need when managing their loan. The company offers unique financial information, especially regarding equity and home values, along with easy to use escrow, tax and insurance figures.

Best For

• Easy-to-manage mortgages
• Specific equity information
• Easy-to-find tax, escrow and insurance information

Pros

• Quality customer care
• Quick closing
• Powerful mobile app

Cons

• This company does purchase mortgages and you may not have chosen them personally

Carrington Mortgage Services offers many products for borrowers with low credit scores, including FHA mortgages. The company works with credit scores as low as 500.

Carrington Mortgage offers FHA, VA, USDA and conventional mortgages. It also offers proprietary programs to help first time buyers and buyers who have had financial challenges. 

4. Best for Education: Guild Mortgage

Best For

Boutique Customer Service

Minimum Credit Score

580

Get started

More Details

Avg. Days to Close Loan

40

Minimum Credit Score

580

1 Minute Review

Guild Mortgage recently purchased Academy Mortgage and is expanding its brand to serve more consumers, carrying a couple hundred branch offices that can serve you. Providing boutique-style service, you get guidance throughout the mortgage process, be it traditional or government-backed.

Best For

• Boutique-style service
• Positive financial backing
• Online and in-person service

Pros

• Many years of service in the industry
• Community impact
• Hundreds of branches

Cons

• You may be wary of a mortgage company that is quickly expanding and purchasing loans

The mortgage process can be intimidating. If you’re curious about what to expect, Guild Mortgage offers a wealth of resources.

It offers several calculators to help you explore different scenarios and mortgage options.

Guild Mortgage offers FHA, VA, USDA and conventional mortgages as well as special programs for nontraditional credit histories. 

5. Best for First-Time Home Buyers: Bank of America

Best For

Broad Range of Mortgage Loans

Minimum Credit Score

620

Compare Lenders

More Details

Avg. Days to Close Loan

45

Minimum Credit Score

620

1 Minute Review

Bank of America is one of the largest financial institutions in the U.S., offering a wide variety of mortgage options for first-time homebuyers, conventional borrowers, and those looking to tap into home equity. The bank stands out for its strong digital tools paired with in-person service through its nationwide branches. Bank of America’s specialized programs, like the Affordable Loan Solution and Preferred Rewards, are particularly appealing for those seeking low down payment options or discounts. While it doesn’t offer USDA loans, and its preferred rewards program is limited to those with higher balances, it’s still a solid choice for most homebuyers.

Best For

• First-time homebuyers seeking low down payment options
• Homebuyers who prefer the option of in-person support at a branch
• Existing Bank of America customers who qualify for preferred rewards
• Borrowers interested in a range of refinance options and home equity loans

Pros

• Wide range of mortgage products, including low down payment options
• Strong digital tools, including the Home Loan Navigator for tracking your loan
• Access to in-person customer service at branches across the country
• Discounts available through the Preferred Rewards program

Cons

• No USDA loans offered
• Preferred Rewards discounts require high account balances

Bank of America is an excellent choice for first time homebuyers. It has branches across the country so it’s easy to talk to a loan officer in person.

Do you want to meet in person for education and guidance?

If so, Bank of America is a great choice. You can start the mortgage process online or in person, whichever you prefer. Bank of America offers FHA, VA and conventional mortgages as well as proprietary mortgage products. 

6. Best for Mobile: Fairway Independent Mortgage Corporation

Best For

Local Lending

Minimum Credit Score

580

Get started

More Details

Avg. Days to Close Loan

45

Minimum Credit Score

580

1 Minute Review

Fairway offers unique loan options that can help you get into affordable housing programs, borrow for your dream home, refinance and more. Serving local communities, you get the care you need that has been designed for your specific locale and situation.

Best For

• Local lending
• Affordable housing programs
• Multiple loan types

Pros

• Support from a local office
• Renovation loans are available
• Investor loans are available

Cons

• The firm may not serve your community

Fairway Independent Mortgage Corporation offers a wide range of mortgage products, including FHA, VA, USDA, conventional and jumbo mortgages.

Its FairwayNow mobile app really sets it apart.

You can do every step of the mortgage process through the mobile app. You can upload documents, talk to a loan officer and see live status updates on your phone. 

7. Best for Service Members: Veterans United

Best For

Current Service Members

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

620

1 Minute Review

Veterans United focuses on VA Loans, which are government-backed loans guaranteed by the U.S. Department of Veterans Affairs to help veterans and active-duty servicemembers buy homes. Veterans United is licensed in all 50 states and the District of Columbia and is the top VA lender in the country. If you’re currently serving or if you’re a veteran, Veterans United is worth considering due to its outstanding customer service and range of mortgage options.

Veterans United’s advisors come from each military branch to ensure it’s taking care of its clients. You can visit its website to learn more about VA loans and the homebuyer process in general and its Lighthouse Program can help you get ready to buy if you’re not quite there yet. It offers strong support if you’ve served our country.

“Nobody handles VA loans better than Veterans United,” says real estate investor Sergio Aguinaga, owner and founder of Michigan Houses for Cash. “Their process is smooth, the support is great and they truly get military buyers. But, of course, the con is that they are only for veterans.”

Best For

• Current service members
• Veterans
• First-time home buyers

Pros

• 24/7 customer service
• Offers VA purchase and refinance loans
• Offers credit consulting through its Lighthouse Program
• Staff from every military branch

Cons

• Only has branches in only 18 states
• Must be a veteran to qualify

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages.

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

What Is FHA?

The Federal Housing Administration insures FHA loans. Private lenders approved by the FHA offer these loans — the FHA helps lenders recover their money if you don’t repay your home loan. This insurance lowers the risk to the lender and allows lenders to offer these mortgages to a variety of borrowers. The FHA has insured more than 46 million mortgages since it was founded in 1934. 

The FHA backs several types of mortgages, including:

• Purchase mortgages
• Refinances for FHA mortgages
• Home rehabilitation loans
• Reverse mortgages

What sets FHA mortgages apart from other types of home loans are its flexible requirements. These include:

• Low down payment requirements: You can make a down payment of as little as 3.5% if you have a 580 credit score or higher. 
• Low credit score requirements: Lenders can offer FHA mortgages to borrowers with credit scores as low as 500. Borrowers with credit scores of 500–579 are required to make a down payment of at least 10%. Look at your credit score for free at Annual Credit Report to help you decide how to save for a house. 

FHA mortgages require borrowers to pay mortgage insurance. Borrowers pay an upfront insurance premium and an annual premium. The monthly mortgage payment includes the cost of mortgage insurance. 

FHA mortgages also have limits. The limit is $314,827 in lower-cost areas. You may be able to borrow as much as $726,525 if you live in a high-cost area. Hawaii and Alaska allow even higher mortgages. You can find the limits for your area through the Department of Housing and Urban Development (HUD). Keep these limits in mind when you decide how much house you can afford. 

What to Look for in an FHA Lender?

You don’t want to choose just any lender for something as important as your mortgage. Here are a few things to look for in the best FHA lenders:

FHA Approval

The FHA must approve lenders that offer FHA mortgages. You can find a list of approved lenders on the HUD website. 

FHA Experience

FHA mortgages are complex. Ask potential lenders how often they handle FHA mortgages. You can also ask where they rank in your state when it comes to FHA loan originations, so choose a lender with experience. 

Other Mortgage Options

An FHA mortgage might be the best fit for you. Just in case it’s not, though, consider what other mortgage options the lender has. Let’s say you have a lower credit score. Does your potential lender have other loan products for borrowers with lower credit scores? 

Digital Tools

Delivering documents in person takes time out of your day. Having the option to upload documents digitally saves time and speeds up the mortgage process. Ask potential lenders about their digital tools (and their cybersecurity practices). If you like working on your phone, look for a lender with a mobile app. 

Speedy Processing

It takes time to get approved for a mortgage. Some lenders are faster than others, though. Ask potential lenders how long it takes to close an FHA mortgage. Keep that information in mind when you choose your lender. 

Excellent Service

Choose a lender with a reputation for excellent service. You can also check on lender complaints on the Better Business Bureau website. Get a sense of its service when you contact the lender for preapproval. If the lender isn’t prompt or doesn’t seem helpful, consider going with someone else.

Your instinct is one of the best guides when it comes to finding a lender. If something seems “off,” trust your gut and move on. 

Tips for Finding the Best FHA Lender

Ready to find the best FHA lender? Here are 5 tips to help make your process easier:

1. Ask Family and Friends for Recommendations

Talk to your family and friends about your lender search. They might be able to recommend a good loan officer or lender. Other professionals you work with, like accountants or lawyers, might be able to make recommendations as well. 

2. Consider Working with a Housing Counselor

A housing counselor is a professional who can help you get ready for a mortgage. These counselors are neutral, so they can help you select the best lender for you. Their services are free or low-cost. Find a counselor near you. 

3. Contact at Least 3 Lenders

Each FHA lender sets its own interest rates and fees. The more lenders you contact, the better. Contacting multiple lenders gives you the best chance of finding the lowest interest rate and fees. Mortgage rates change daily, so try to contact all your potential lenders on the same day to make the most accurate comparison possible.

4. Write Down Your Questions

Make a list of your questions before you contact lenders. Note each lender’s answers. If any lender is hesitant about answering your questions, note that as well. 

5. Look at the Total Cost of Your Mortgage

The interest rate is important but it only tells part of the story. Review your rate quotes carefully. Look for origination fees, application fees and discounts. Keep the big picture in mind. 

Contacting multiple lenders takes time, but it’s time well spent. Let each lender know you’re interested in an FHA mortgage so you get the most accurate quote possible.

Find the Right FHA Lender

Choosing the right FHA lender takes time. Even a small interest rate difference can save you thousands, so it’s worth taking the time to compare. Keep in mind that you might be able to refinance your mortgage and get a better rate. 

An FHA mortgage may not be the best product for you. You may want to compare FHA mortgages and conventional mortgages if you have a good credit score to see which offers the best rates. You may also qualify for a VA mortgage or a USDA mortgage. In that case, you may want to explore these to see which suits you best. Explore state and local homebuyer programs to see if additional assistance is available. You may be able to qualify for down payment or closing cost assistance. 

FHA mortgages are a solid option for many homebuyers. The low down payment and flexible down payment options make them especially well-suited for first time homebuyers. More experienced homebuyers may find them helpful as well. 

Frequently Asked Questions

The post Best FHA Lenders by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

If you’re exploring options to manage multiple debts, a home equity loan for debt consolidation might be a powerful financial strategy to consider. Many homeowners find themselves juggling high-interest debts like credit cards, personal loans, or medical bills, and the strain of multiple payments each month can be overwhelming.

A home equity loan offers a way to simplify this situation by using the equity you’ve built in your home to consolidate your debts into a single, manageable loan. But how exactly does it work, and what are the benefits and potential risks? In this post, we’ll explore how a home equity loan can help streamline debt, reduce interest rates, and set you on a clearer path to financial stability.

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How Does a Home Equity Loan Work?

A home equity loan is a second mortgage on your home. It’s based on the amount of equity you have in your home. 

Your equity is the difference between your home’s value and the amount you owe on your mortgage. Let’s say you own a home valued at $175,000. You owe $125,000 on your mortgage. That means you have $50,000 in equity. 

With a home equity loan, you borrow against a percentage of your home’s equity. Lenders will typically allow you to borrow about 80% of your home’s equity. If you have $50,000 in equity, that means you could borrow around $40,000. 

You receive the funds as a lump sum, and your home secures the loan. If you fall behind on your payments, your lender has the right to foreclose on your home and sell it to pay off your loan. 

Home Equity Loan Requirements

What will lenders consider when you apply for a home equity loan? Let’s take a look. 

• Your home’s value: Lenders will typically request an appraisal to confirm the value of your home. Since your home’s equity is based on the value of your home, lenders want to have an accurate assessment of how much it’s worth. 
• Your credit score: As with most financial transactions, how you’ve handled credit in the past plays a role in whether lenders will approve you for a home equity loan. Lenders prefer a credit score of 620 or higher, but there might be some flexibility depending on the lender. 
• Your debt-to-income (DTI) ratio: Your DTI ratio compares your monthly debt payments, including your potential home equity loan, to your pre-tax income. Let’s say your current mortgage, home equity loan, car payment, credit card minimums and student loans come to $2,000 per month. Your pre-tax income is $5,000 per month. That gives you a DTI ratio of 40% ($2,000 / $5,000 = 0.4 * 100 = 40). Lenders are typically looking for a DTI ratio of 43% or less. 

Featured Home Equity Loan Offerings

Best For

Flexible Use of Funds

Minimum Credit Score

N/A

Get started securely through Point.com’s website

More Details

Avg. Days to Close Loan

6 to 8 weeks

Minimum Credit Score

N/A

1 Minute Review

Point Home Equity is a home equity investment lender. The company was founded in 2015 by Eddie Lim and Eoin Matthews. They wanted to create a company that makes it easier for people to tap into their wealth. Since its humble beginnings, Point Home Equity has served homeowners in 25 states plus Washington, DC. It offers home equity for people with less-than-perfect credit and has more generous guidelines than most home equity loan and HELOC requirements. Borrowers also don’t have to make monthly payments throughout the term.

Best For

• Homeowners with significant equity who want to avoid debt
• Those looking to access funds without monthly payments
• People who may not qualify for traditional loans

Pros

• No monthly payments on loan
• Borrowers can get approved with bad credit
• Offers terms up to 30 years
• Generous debt-to-income ratio requirements
• Ability to exit at any time

Cons

• Entire payment is due at the end of the term
• The more the property appreciates, the more expensive it will be to buy out Point Home Equity’s stake
• You cannot get a HELOC, home equity loan or refinance while you have a home equity investment

Best For

Online Mortgages

Minimum Credit Score

580

Get started securely through Rocket Mortgage (formerly Quicken Loans)’s website

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Rocket Mortgage (formerly known as Quicken Loans) is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.

Best For

• Homebuyers who are looking to complete the mortgage application process on their own
• Homebuyers who have found their dream home and are looking to move through the approval process quickly
• Homebuyers with good credit scores looking to review their mortgage options
• Current homeowners looking to refinance within the next few months

Pros

• Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
• You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
• RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
• The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
• The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process

Cons

• While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
• You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for

Best For

Self-employed Borrowers

Minimum Credit Score

620

get started securely through CrossCountry Mortgage’s website

More Details

Disclosure: Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA 

Avg. Days to Close Loan

30 – 40

Minimum Credit Score

620

1 Minute Review

CrossCountry Mortgage was started in 2003 by Ronald Leonhardt Jr., founder and CEO. Its headquarters is located in Cleveland, Ohio, but it’s licensed in all 50 states, D.C. and Puerto Rico, and it has over 700 branch locations across the country. Hopeful homeowners turn to CrossCountry Mortgage for its diverse portfolio of loan options, including conventional loans, Federal Housing Administration (FHA) loans, United States Department of Veterans Affairs (VA) loans and United States Department of Agriculture (USDA) loans.

 

Best For

• Self-employed professionals
• Retirees
• Investors
• Condo buyers

Pros

• Provides loans across all 50 states, D.C. and Puerto Rico
• 120 mortgage purchase, refinance and home equity solutions
• Can work with credit scores as low as 500
• Tax returns aren’t required
• Ideal for first-time homebuyers

Cons

• Doesn’t post rates online
• Underwriting process may take longer

When You Should Consider a Home Equity Loan

When is a home equity loan the right move? It might be the right move if:

1. You Have Enough Equity in Your Home

Getting a home equity loan is a process, and you have to pay closing costs. You need to make sure it’s worth the trouble and the closing costs. If you don’t need much, you might be better served by a different product like a personal loan. 

2. It Makes More Sense Than Alternative Products

A cash-out refinance and a home equity line of credit (HELOC) also allow you to tap into your home equity. A cash-out refinance means taking out an entirely new mortgage on your home, though. HELOCs are second mortgages, like home equity loans. They offer a flexible credit line instead of a lump sum, and they tend to have variable interest rates, which are interest rates that can change. HELOC requirements are a bit more stringent; you typically need a credit score of at least 680 to qualify. 

3. The Interest Rate Makes Sense

If you’re taking out a home equity loan to consolidate debt, the interest rate needs to be the same or lower than the interest you’re paying on your debt. Otherwise, it doesn’t make sense or benefit you in the long run. Although having 1 payment for everything is simpler, you’ll pay more in interest if the rate isn’t competitive. 

4. You’re Comfortable with the Payments

Since a home equity loan is secured by your home, make sure the payment is affordable. If you’re consolidating debt, it should be since you won’t be making those debt payments, but run the numbers to be sure. You’ll also need to continue making your mortgage payments. 

Home Equity Loan for Debt Consolidation

A perk of home equity loans is that you can use the funds for anything you want, including debt consolidation. While there are no restrictions on how you can use the funds, you want to be sure it makes financial sense. 

For example, federal student loans tend to have low interest rates and special accommodations if you experience hardship, so that’s 1 type of debt you may not want to pay off with a home equity loan. 

You also need to be committed to not continuing the same spending patterns that got you into debt in the 1st place. You may have racked up debt due to special circumstances, like a job loss or unexpected medical bills. In that case, using a home equity loan makes sense to lower your debt and streamline your spending. 

If you got into debt due to challenges with budgeting and overspending, consider taking a look at your habits before you take out a home equity loan. If you take out a home equity loan, pay off your credit cards, and then max them out again, you’ve put yourself in a worse position than before. 

Have a plan for keeping your debt low. For example, you might find a budgeting app that’s easy to use so you keep your spending on track. Or you might work with a non-profit credit counseling agency to develop a budget and a debt management plan for improving your credit score. 

Many people struggle with debt, and there are a lot of resources to help. Home equity loans tend to have reasonable interest rates and are accessible to those with less than perfect credit. It could be the right move for you and a path to paying off your debt. 

Choose a Home Equity Loan

If you’ve decided a home equity loan is right for you, you’ll need to choose a lender. Check with at least a few lenders and compare interest rates and APRs. Look at both online mortgage lenders and brick-and-mortar institutions to get a sense of which home equity loan rates will serve you the best. 

Once you find a lender, the process of getting a debt consolidation loan is similar to the process of buying your home. You’ll fill out an application and you’ll need to provide proof of income. You’ll also need to provide a copy of your current mortgage statement and proof of homeownership. 

Once you’ve submitted your application, your lender will order an appraisal. The sooner you get it scheduled, the better. Once your lender has all the information it needs, it will make a decision on your application. If approved, you’ll set a date to sign the closing documents. You’ll receive the documents a few days in advance. Take the time to review them and ask the lender questions if there are any unexpected changes. 

Once you sign the documents, it will take a few days to receive the funds. If you’re consolidating debt, pay off your debts with the proceeds as soon as the funds are available.

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Frequently Asked Questions

The post What is a Home Equity Loan for Debt Consolidation? by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

Home equity lines of credit (HELOCs) and home equity loans (HELOANs) serve similar purposes but are different.

Homeownership has its perks. Once you’ve owned your home for a while and made regular payments, you build up equity. If you run into a financial need, you can borrow against your equity using a home equity line of credit or a home equity loan. Take a look at what those are and whether they’re right for you.

What is a Home Equity Line of Credit (HELOC)?

A home equity line of credit (HELOC) offers you a credit line based on your home’s equity. What exactly is equity? Your equity is the value of your home less the balance of your mortgage.

Let’s say you own a home valued at $175,000. You owe $100,000 on your mortgage. That means you have $75,000 in equity in your home ($175,000 – $100,000 = $75,000).

With a HELOC, a lender will look at the amount of equity you have, your income, your credit history and your overall debt. Based on those factors, the lender may approve you for a credit line. Lenders typically don’t allow you to borrow more than 85% of your home’s equity. Based on the example above, the most you would be approved for is $63,750.

A credit line is similar to a credit card so you’re approved for the maximum amount you can withdraw. You don’t have to withdraw it all at once. You can withdraw what you need when you need it. Once you borrow, you typically have to make payments, but those payments may be interest only. You’ll have a set period to borrow funds, which is known as your draw period. After your draw period ends, you must start making payments. This is called your repayment period and it may last for 20 years or more.

What is a Home Equity Loan?

A home equity loan is similar to a HELOC, in that you’re borrowing against the equity in your home. Unlike a HELOC, you borrow a lump sum of money and then you begin paying it back right away. 

As with a HELOC, you can typically borrow up to 85% of the equity in your home. Lenders look at your credit, income, and debt when they decide whether to offer you a home equity loan. Home equity loans typically have a fixed interest rate, which means it always stays the same. The monthly payments also stay the same. 

Comparing a Home Equity Line of Credit vs. Home Equity Loan

A home equity line of credit (HELOC) and a home equity loan are both types of loans that allow you to access the equity in your home, but they have some key differences.

When deciding between a HELOC and a home equity loan, consider your financial goals, borrowing needs, and preferences for repayment terms and interest rate stability. It’s recommended to compare offers from different lenders to determine which option suits your circumstances best. Additionally, it may be helpful to consult with a financial advisor or loan officer who can provide personalized guidance based on your specific situation.

Let’s break down how they compare:

Structure

A HELOC is a revolving line of credit, similar to a credit card. It provides you with a maximum borrowing limit, and you can borrow against that limit as needed during a specific draw period, typically 5 to 10 years. You can borrow, repay, and borrow again within a specific draw period. A home equity loan, also known as a second mortgage, is different in that it provides you with a lump sum of money upfront. This loan is repaid over a fixed term, usually with a fixed interest rate and monthly payments.

Access to funds

With a HELOC, you can access funds as needed during the draw period by writing checks, using a card, or transferring funds electronically. You can borrow the entire available amount or a portion of it, depending on your requirements. 

However, since a home equity loan gives you the entire loan amount upfront as a lump sum, you cannot access additional funds beyond the loan amount. If you need more money, you’ll need to apply for a new loan.

Repayment schedule

With a HELOC, during the draw period, you only need to make interest payments on the amount you’ve borrowed. After the draw period ends, a repayment period begins, typically 10 to 20 years, during which you repay both principal and interest. The interest rate on a HELOC is usually variable, meaning it can fluctuate over time. 

With a home equity loan, you start repaying the principal and interest immediately after receiving the lump sum. The loan is repaid in equal monthly installments over the agreed-upon term. The interest rate is typically fixed, providing more stability in terms of monthly payments.

Interest rates

The interest rate on a HELOC is usually variable, meaning it can change over time based on market conditions. The rate is often tied to a benchmark, such as the prime rate, plus a margin determined by the lender.

The interest rate on a home equity loan is usually fixed, meaning it remains the same throughout the loan term. This provides predictability in terms of monthly payments.

Flexibility

A HELOC offers more flexibility since you can borrow and repay multiple times during the draw period. It can be suitable if you have ongoing or unpredictable expenses, such as home renovations or education costs. Since home equity loan provides a one-time lump sum, it’s better suited for specific expenses where you know the exact amount you need upfront, such as debt consolidation or a large purchase.

HELOC vs. Home Equity Loan – Which is Right for You?

Home equity loans and Home Equity Lines of Credit (HELOCs) allow you to borrow against your home’s equity, but they differ significantly. Consider your funding needs and how you plan to use the money. A home equity loan provides a fixed sum with a structured repayment plan, ideal for consolidating debts. 

However, it’s essential to accurately assess your borrowing amount to avoid overborrowing. Conversely, if you need flexibility and want to borrow as needed, a HELOC might be better. Keep in mind that this requires careful management of repayment and an awareness of potential changes in payment amounts.

Featured Offerings

Best For

Flexible Use of Funds

Minimum Credit Score

N/A

Get started securely through Point.com’s website

More Details

Avg. Days to Close Loan

6 to 8 weeks

Minimum Credit Score

N/A

1 Minute Review

Point Home Equity is a home equity investment lender. The company was founded in 2015 by Eddie Lim and Eoin Matthews. They wanted to create a company that makes it easier for people to tap into their wealth. Since its humble beginnings, Point Home Equity has served homeowners in 25 states plus Washington, DC. It offers home equity for people with less-than-perfect credit and has more generous guidelines than most home equity loan and HELOC requirements. Borrowers also don’t have to make monthly payments throughout the term.

Best For

• Homeowners with significant equity who want to avoid debt
• Those looking to access funds without monthly payments
• People who may not qualify for traditional loans

Pros

• No monthly payments on loan
• Borrowers can get approved with bad credit
• Offers terms up to 30 years
• Generous debt-to-income ratio requirements
• Ability to exit at any time

Cons

• Entire payment is due at the end of the term
• The more the property appreciates, the more expensive it will be to buy out Point Home Equity’s stake
• You cannot get a HELOC, home equity loan or refinance while you have a home equity investment

Point is one of the most unique home equity platforms on the market because of how it works. You don’t get a loan from Point. You sell them a portion of the future appreciation of your home (that they recover when you sell or refinance). In exchange for the appreciation you offer, you get cash from Point that you can use for anything you like with no monthly payments, credit checks or loan applications.

Best For

Homeowners With Limited Cash Flow

Minimum Credit Score

N/A

Get started securely through Unlock Mortgage’s website

More Details

Avg. Days to Close Loan

N/A

Minimum Credit Score

N/A

1 Minute Review

American homeowners are collectively sitting on nearly $28.7 trillion worth of home equity. For perspective, that’s over $334,000 of equity per owner-occupied housing unit in the U.S. While traditional mortgage-lending models like home equity line of credit,  cash-out refinancing and home equity loans provide a means of tapping into your home equity, they have drawbacks, especially in a rising interest rate environment. For instance, the variable interest that characterizes the home equity line of credit can lead to unpredictable and potentially higher borrowing costs, Cash-out refinance can exacerbate your overall mortgage debt, and like home equity loans, there’s a risk of foreclosure if you don’t pay on time. Additionally, these models require strict eligibility or qualification criteria. 

What if you could access your home equity without undergoing stringent eligibility requirements or worrying about interest rates? That’s where Unlock Technologies comes in. Unlock Technologies offers a home equity agreement  — an alternative to traditional lending models that lets you tap into your home equity without loans. The company invests in your home’s future appreciation by offering you cash upfront. A combination of factors, including the current value of your home, pre-existing mortgage debt and credit history, determines the size (amount of cash) and terms of the agreement. 

Since it involves no loans, there are no interest rates and monthly payments to worry about. You only repay Unlock when you sell your home. For instance, you could receive 15 percent of your home’s equity upfront, which you can use as you see fit. In return, Unlock would acquire a 20 percent share in your home’s future appreciation. You could also buy back Unlock’s stake in your home over time without having to sell your home. Unlock accepts a FICO score as low as 500, making it an ideal option if you’ve got a poor credit history and limited cash flow but require a substantial loan for an expense that will enhance your long-term financial stability.

Read on for a constructive review of the platform, its pros and cons and how it can compare with other mortgage models.

Best For

• Homeowners with damaged credit history and limited cash flow seeking substantial cash to invest in projects that guarantee long-term financial security
• Entrepreneurs and small business owners seeking to leverage their home equity and access capital to invest in their businesses or expand operations
• Homeowners who wish to undertake renovation projects to enhance property value, as well as those interested in building an emergency fund or financial safety net using their home equity
• Real estate investors who want to access equity for new investment opportunities or fund higher education expenses
• Homeowners with substantial home equity who are considering moving within the next 10 years, which is the maximum term length for Unlock’s services

Pros

• Low minimum credit requirements (FICO) of 500
• Flexible income and limited debt-to-income (DTI) requirements — Unlock is only interested in your home value
• No monthly payments — you don’t have to pay until you sell your house at the end of the agreement
• No interest rate — Unlock is not a loan or lending firm
• Access funding in 30 to 60 days with little or no restrictions on fund use
• Streamlined application process from getting quotes to accessing funding
• The application process doesn’t require hard credit pull and doesn’t impact your credit score
• Access up to $500,000 worth of funding, and there’s no need to refinance

Cons

• Could potentially complicate the process of obtaining another mortgage
• Receive less from your home when you finally sell your home
• Relatively low loan term of 10 years
• Operates in only 15 states

Unlock isn’t a line of credit or a loan. When you reach out to Unlock, they accept credit scores as low as 500 and make an investment in your home. You can use that cash for anything you need, and you don’t pay the platform back until you sell the house. This means you can allow the house to rise in value and still get the benefits of a home equity loan or line of credit without adding monthly payments, closing costs and stress to your plate.

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Frequently Asked Questions

The post Home Equity Line of Credit vs. Home Equity Loan by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

Veterans United stands out as the best choice for VA loan rates and lenders

The Department of Veterans Affairs supports veterans and current service members. One way it does that is by offering affordable mortgages to our veterans. Here’s the inside scoop on finding the best VA loan rates. 

Quick Look: Best VA Loan Mortgage Lenders

• Best Overall for VA Loans: Veterans United
• Best for Online: Rocket Mortgage® (formerly Quicken Loans)
• Best for First Time Home Buyers: USAA
• Best for Experience: Navy Federal Credit Union
• Best for Low Credit Scores: Caliber Home Loans

5 Best Mortgage Lenders for VA Loans

To find the best rates, you should contact multiple lenders. Here are our 5 best mortgages companies picks for VA loans:

1. Best Overall: Veterans United

Best For

Current Service Members

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

620

1 Minute Review

Veterans United focuses on VA Loans, which are government-backed loans guaranteed by the U.S. Department of Veterans Affairs to help veterans and active-duty servicemembers buy homes. Veterans United is licensed in all 50 states and the District of Columbia and is the top VA lender in the country. If you’re currently serving or if you’re a veteran, Veterans United is worth considering due to its outstanding customer service and range of mortgage options.

Veterans United’s advisors come from each military branch to ensure it’s taking care of its clients. You can visit its website to learn more about VA loans and the homebuyer process in general and its Lighthouse Program can help you get ready to buy if you’re not quite there yet. It offers strong support if you’ve served our country.

“Nobody handles VA loans better than Veterans United,” says real estate investor Sergio Aguinaga, owner and founder of Michigan Houses for Cash. “Their process is smooth, the support is great and they truly get military buyers. But, of course, the con is that they are only for veterans.”

Best For

• Current service members
• Veterans
• First-time home buyers

Pros

• 24/7 customer service
• Offers VA purchase and refinance loans
• Offers credit consulting through its Lighthouse Program
• Staff from every military branch

Cons

• Only has branches in only 18 states
• Must be a veteran to qualify

Veterans United earned our top spot because of its excellent reviews from customers. It works closely with leaders from all branches of the military to ensure its borrowers are educated about home ownership and VA loans.

Veterans United has an easy-to-navigate website. Although you can’t complete an application online, you can get an initial quote. You can also view its rates for easy comparison shopping. 

Why we love it: Veterans United specializes in serving veterans, active duty service members, and their families, ensuring they receive personalized and dedicated support throughout the loan process. With their extensive experience in VA loans, Veterans United offers competitive rates and flexible loan options tailored to meet the unique needs of military borrowers.

2. Best for Online: Rocket Mortgage® (formerly Quicken Loans)

Best For

Online Mortgages

Minimum Credit Score

580

Get started securely through Rocket Mortgage (formerly Quicken Loans)’s website

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Rocket Mortgage (formerly known as Quicken Loans) is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.

Best For

• Homebuyers who are looking to complete the mortgage application process on their own
• Homebuyers who have found their dream home and are looking to move through the approval process quickly
• Homebuyers with good credit scores looking to review their mortgage options
• Current homeowners looking to refinance within the next few months

Pros

• Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
• You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
• RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
• The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
• The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process

Cons

• While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
• You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for

You can complete the mortgage process entirely online with Rocket Mortgage® (formerly known as Quicken Loans). If you need help, you can chat with mortgage specialists via the website or talk to them by phone. You can upload documents using its website or mobile app and also take a sneak peek at current mortgage rates on its site.

Take advantage of its helpful educational materials as well. Rocket Mortgage® boasts rave reviews from its customers. It offers fixed-rate VA mortgages with 15-, 25- and 30-year terms.

Why we love it: We love Rocket Mortgage for VA loans because they offer competitive rates that are among the best in the market. Their user-friendly online platform makes the loan application process quick and convenient, providing a hassle-free experience for borrowers.

3. Best for First Time Home Buyers: USAA

Best For

Veterans and Direct Family Members

Minimum Credit Score

620

Contact a Lender

More Details

Avg. Days to Close Loan

40

Minimum Credit Score

620

1 Minute Review

USAA is a program that is aimed at veterans and their family members, offering banking, loans, insurance, mortgages and investing. Remember that you can check on your eligiblity through the platform or a direct family member who is already a member.

Best For

• Veterans and Direct Family Members
• Easier access to financial products
• Insurace is also available

Pros

• Preferred service for members
• Younger family members can more easily get the help they need
• Exclusive programs

Cons

• You may not be eligible based on rules in your state

If you’re a first time home buyer, it’s best to work with a lender with a variety of mortgage options. USAA is one of the best companies for first time buyers because it offers several mortgages. It has several VA mortgages, conventional mortgages and a special loan option it has designed for first time home buyers.

USAA has a reputation for excellent service. Its loan officers will help you choose the best loan for your needs, whether it’s a VA loan or something else. 

Why we love it: With their expertise in understanding the unique needs of veterans, USAA provides flexible loan options and guidance throughout the entire home buying process. Their commitment to serving those who have served our country makes them a top choice for VA loans.

4. Best for Experience: Navy Federal Credit Union

Best For

Active and Retired Military

Overall Rating

Get started

More Details

APR

7.49%–18.00%

N/A

APR

7.49%–18.00%

Origination Fee

$0

Term Lengths

12–60 Months

1 Minute Review

Navy Federal Credit Union serves active and retired military personnel with a wide range of banking options, including mortgages that may include VA, conventional, FHA, USDA, jumbo, construction and/or investment loans. Check your eligibility on the Navy Fed website and apply today, speak to a loan officer or visit your local branch for more information.

Best For

• Active and retired military
• Military families
• Getting the same loans you would get at any other bank

Pros

• Simple for military personnel to manage accounts
• Many other banking services are available
• The credit union keeps costs and fees down

Cons

• Remember that spouses or children need to verify their eligibility before opening accounts

Navy Federal Credit Union is one of the top 5 VA lenders in the country. That level of experience is essential. VA loans have specific requirements, and the documentation involved may be daunting for less experienced VA loan lenders.

Navy Federal offers fixed-rate VA loans, conventional loans, FHA loans, and proprietary products. It works exclusively with military members and their families, so its loan officers understand your unique needs. 

Why we love it: With a history of serving the military community since 1933, Navy Federal Credit Union has extensive experience in providing specialized financial products, including VA loans. They consistently receive high ratings for customer satisfaction and are known for their personalized service.

5. Best for Low Credit Scores: Caliber Home Loans

Best For

Personalized Service

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

45

Minimum Credit Score

620

1 Minute Review

Caliber Home Loans is a unique platform that looks to connect you immediately with a loan officer to discuss your various needs. Several loan types are available, you can apply right from their homepage and the customer portal is easy to find and use. At the end of the day, you get personalized service from the very beginning with Caliber.

Best For

• Personalized service
• Connect instantly with a loan officer
• Simple customer portal

Pros

• Apply from the homepage
• Wide service area
• Many loan types to choose from

Cons

• You might want to learn more before speaking with a loan officer

Not everyone has perfect credit. Caliber Home Loans works with borrowers with credit scores as low as 580. With a score of 580–619, you may qualify for a fixed-rate mortgage. With a credit score of 620 or higher, you may qualify for ARMs as well.

Caliber Home Loans also offers several other loan products if a VA loan isn’t the right fit for you. Caliber is one of the top nonbank lenders in the country. 

Why we love it: We love Caliber Homes because of its competitive interest rates, flexible loan options, and low down payment for military members and veterans. Its excellent customer service and track record of helping veterans secure financing for their dream homes make them a trusted lender in the industry.

What Is a VA Loan?

A VA loan is a home loan backed by the Department of Veterans Affairs. You can use a VA loan to purchase a home or refinance a mortgage you already have. Here are the primary features of a VA loan:

• No down payment requirement: You must make a down payment of 3.5%–20% for most types of mortgages. You can save significantly by not having to make a down payment. 
• No mortgage insurance: You are typically required to purchase mortgage insurance if you make a down payment of less than 20%. Mortgage insurance protects the lender if a borrower defaults. It can add significantly to your monthly mortgage payment. 
• VA assistance if you become delinquent: If you run into financial difficulties down the road, the VA will assist you in getting your mortgage back on track. 

Private lenders offer VA loans. The VA approves lenders who provide VA mortgages. 

Types of VA Loans

The VA guarantees many types of mortgages. The most common types are:

Fixed-Rate Mortgages

These mortgages have the same monthly payment for the life of the mortgage. This is because the interest rate is the same for the mortgage term. Fixed-rate mortgages have a variety of terms. Your term is how long the mortgage lasts. Fixed-rate mortgages often have 15-, 20- or 30-year terms. 

Adjustable-Rate Mortgages

These mortgages have a monthly payment that could change. This is because the lender may increase or decrease the interest rate. Lenders change the interest rate based on market conditions. Adjustable-rate mortgages (ARMs) often have an introductory period with a fixed rate. A 5/1 ARM has a 5-year introductory period. After that, the lender can change the rate once per year. 

Lenders may offer VA loans as fixed-rate mortgages, ARMs or both.  

Who Is Eligible for a VA Loan?

Many current service members and veterans are eligible for a VA loan. Here are the details on eligibility:

Veterans

Veterans must meet service length requirements. Veterans who served during wartime typically must have at least 90 days of active duty service, unless discharged due to a service-related disability. You also must not have a dishonorable discharge. Veterans who served during peacetime must have at least 181 continuous days of active duty service unless discharged due to a service-related disability. 

Current Service Members

Current service members are eligible after 90 days of continuous active duty service. 

Reserve or National Guard

You must have at least six years of eligible service unless you were discharged due to a service-related disability. 

Surviving Spouse

You must be an un-remarried spouse of a veteran who died while in service or due to a service-connected disability. Spouses of a service member who is missing in action or a prisoner of war may also qualify. 

If you are uncertain of whether you meet the eligibility requirements, contact the VA. The VA can confirm your eligibility and provide you with a Certificate of Eligibility if you meet the requirements for a home loan program. 

$0 Down VA Loans for Veterans & U.S. Military

CHECK ELIGIBILITY

$0 Down VA Loans for Veterans & U.S. Military

Find out if you’re eligible today! Start the preapproval process online with Veterans United.

CHECK ELIGIBILITY

VA Loan Requirements

The VA has a few requirements for the mortgages it guarantees. Lenders must consider:

Your Debt Ratio

Your debt ratio is the total of your monthly debt payments compared to your monthly income. Let’s say your debt payments (car payment, potential mortgage payment, credit card minimums) add up to $1,500 per month. If your monthly gross income is $3,000, then you have a debt ratio of 50%. The VA doesn’t have a maximum debt ratio. If your debt ratio is more than 41%, the VA lender must look for compensating factors, like extra savings or an excellent credit history. 

Loan Amount

Technically, there is no maximum loan amount for a VA loan. The VA only guarantees up to $453,100 in most areas without a down payment. You can visit the VA website to find out the loan limit in your area.

Credit Score

Your credit score is a computer-generated number that gives lenders an idea of your credit history. The VA doesn’t have a minimum credit score requirement. Lenders may have a minimum credit score requirement, though. 

Your Income

The VA has residual income guidelines that lenders must follow to ensure borrowers can afford their home loans. The VA wants lenders to confirm that you have enough income to handle unexpected expenses. The guidelines vary depending on where you live and the amount of your mortgage. 

Lenders also look at the property you’re planning to purchase. The property must be safe, structurally sound and sanitary. Many properties fit these requirements, but a serious fixer-upper might not make the cut. You must also use the VA home loan for a primary residence. You can’t use it to buy a vacation home. 

VA Loan Rates

What should you expect when it comes to VA loan rates? Here is how a VA loan stacks up against other types of mortgages:

Applying for a VA Loan 

The first step to getting a VA loan is getting your Certificate of Eligibility (COE). Many service members can get their COEs through the eBenefits portal. If you can’t get your COE through the portal, contact the VA for assistance. 

After you have your COE, gather the rest of your financial documents. You will need recent tax returns, bank statements and pay stubs. Contact a few lenders and get a quote. Choose a lender for preapproval. After you’re preapproved, look for a home. When you’ve found a home, choose a lender that provides a good rate and excellent service. Finish your application, and once your lender has formally approved your application, you’ll be ready to close and get your keys. 

Frequently Asked Questions

The post Best VA (Veterans) Loan Rates and Lenders by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

Jump straight to it: The best Minnesota mortgage lender for first time home buyers is Rocket Mortgage

The Land of 10,000 Lakes is known for its chilly winter weather as well as its cultural and employment opportunities. Ready to buy your first Minnesota home? As a first time home buyer, MN offers the perfect place to call home. 

Quick Look: Best Mortgage Lenders for First Time Home Buyers in MN

• Best Overall: Rocket Mortgage®
• Best for Low Credit Score: Bell Bank
• Best for Self-Employed Home Buyers: CrossCountry Mortgage
• Best for Mobile: Fairway Independent Mortgage
• Best for Credit Monitoring: loanDepot
• Best for In-Person Service: US Bank
• Best for Lender Comparison: Credible Mortgage
• Best for VA Loans in Minnesota: Veterans United

8 Best Mortgage Lenders in MN for First Time Buyers

Finding the right lender can be daunting. Here are the best mortgage companies for first time buyers in Minnesota:

1. Best Overall: Rocket Mortgage®

Best For

Online Service

Minimum Credit Score

580

Get started

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

580

1 Minute Review

Quicken Loans® offers award-winning customer service for both originating and servicing mortgages. This means you’re taken care of at every step of the mortgage process. Quicken Loans® offers a range of mortgage products. You can apply for its loans from the comfort of your home by phone or online through Rocket Mortgage® by Quicken Loans®.

Best For

• People who prefer online service
• People who want a range of home loan options
• People who want to refinance

Pros

• Extensive customer service availability
• Government-backed and conventional loan options for home buyers
• Works with investors and people buying second homes

Cons

• No in-person service options
• No home equity loans or lines of credit

Rocket Mortgage offers an easy-to-navigate website filled with educational resources. It includes a home buyer’s guide and mortgage calculators. You can complete the application online, but you’re not left on your own.

You can chat with an expert or get one on the phone if you have any questions along the way. You can even take a peek at its rates online so you know how it stacks up against other lenders. 

Loan types offered: Conventional, FHA, USDA and VA

Credit score requirement: 620

Average days to close a loan: 30-45 days

2. Best for Low Credit Score: Bell Bank

Best For

Best for Low Credit Score

Minimum Credit Score

700

Get started

More Details

Avg. Days to Close Loan

N/A

Minimum Credit Score

700

1 Minute Review

Bell Bank allows you to get al the banking, investing, insurance, loan and financial services that you need. You can manage your account online, find a location to visit and get competitive rates on all their products.

Best For

• Low credit score
• Competitive rates
• Multiple banking services

Pros

• Easy to apply online
• Investing and insurance are also available
• Reach out for client care and insights

Cons

• You may not live in a location where Bell Bank can serve you

Bell Bank is independently owned. The Minnesota Housing Finance Authority has approved Bell Bank to offer its mortgage products. This means it can work with a wide range of financial situations.

Bell Bank offers advice, local knowledge and excellent service. That’s what makes it one of the best lenders for first time buyers. 

Loan types offered: Conventional, FHA, USDA VA

Credit score requirement: 620

Average days to close a loan: 30 days

3. Best for Self-Employed Home Buyers: CrossCountry Mortgage

Best For

Self-employed Borrowers

Minimum Credit Score

620

get started securely through CrossCountry Mortgage’s website

More Details

Disclosure: Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA 

Avg. Days to Close Loan

30 – 40

Minimum Credit Score

620

1 Minute Review

CrossCountry Mortgage was started in 2003 by Ronald Leonhardt Jr., founder and CEO. Its headquarters is located in Cleveland, Ohio, but it’s licensed in all 50 states, D.C. and Puerto Rico, and it has over 700 branch locations across the country. Hopeful homeowners turn to CrossCountry Mortgage for its diverse portfolio of loan options, including conventional loans, Federal Housing Administration (FHA) loans, United States Department of Veterans Affairs (VA) loans and United States Department of Agriculture (USDA) loans.

 

Best For

• Self-employed professionals
• Retirees
• Investors
• Condo buyers

Pros

• Provides loans across all 50 states, D.C. and Puerto Rico
• 120 mortgage purchase, refinance and home equity solutions
• Can work with credit scores as low as 500
• Tax returns aren’t required
• Ideal for first-time homebuyers

Cons

• Doesn’t post rates online
• Underwriting process may take longer

CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. They offer traditional loan terms, as well as more flexible home payment plans with their 40-year loan program.

It’s also easier to get approved if you’re self-employed. Tax returns are not required and you’ll only need one year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts.

Loan types offered: Conventional, FHA, USDA, VA

Credit score requirement: 620

Average days to close a loan: 21 days

4. Best for Mobile: Fairway Independent Mortgage Corporation

Best For

Local Lending

Minimum Credit Score

580

Get started

More Details

Avg. Days to Close Loan

45

Minimum Credit Score

580

1 Minute Review

Fairway offers unique loan options that can help you get into affordable housing programs, borrow for your dream home, refinance and more. Serving local communities, you get the care you need that has been designed for your specific locale and situation.

Best For

• Local lending
• Affordable housing programs
• Multiple loan types

Pros

• Support from a local office
• Renovation loans are available
• Investor loans are available

Cons

• The firm may not serve your community

If you’re always on the go, a mobile app can help you stay in touch with your lender. Fairway Independent Mortgage Corporation offers a mobile app that will keep you in touch throughout the process.

You can securely upload documents and message your loan officer from the mobile app. It also offers several options suitable for first time buyers, including conventional, jumbo, FHA, USDA and VA mortgages. 

Loan types offered: Conventional, FHA, VA, USDA, Jumbo

Credit score requirement: 620

Average days to close a loan: 30-45 days

5. Best for Credit Monitoring: loanDepot

Best For

Comparing Lenders

Minimum Credit Score

620

Compare Lenders

More Details

Avg. Days to Close Loan

15

Minimum Credit Score

620

1 Minute Review

Loandepot is a clearinghouse for anyone to get a competitive loan quote and preapproval. There are several partners on the site who can provide  loans to consumers with a range of rates and terms available based on your credit rating.

Best For

• Comparing lenders
• Lots of information on the partners on the site
• Quality interface

Pros

• Apply quickly
• Get competitive rates
• Choose the loan that works best for your situation

Cons

• Not all partners can give you the best rates

loanDepot is a non-bank lender that gives you convenience and efficiency online with the option to visit one or over 200 branches across the country. loanDepot offers fixed-rate and adjustable-rate conventional mortgages. You could also secure jumbo, FHA or VA loans, although conventional loans made up most of LoanDepot’s mortgage originations last year. LoanDepot also offers 10-, 15-, 20- and 30-year mortgage terms. 

In addition to mortgages and home refinancing, LoanDepot offers free credit score monitoring to help you prepare to apply for a mortgage. You’ll need a minimum credit score of 620 and at least 5% downpayment. 

Loan types offered: Conventional, FHA, VA, USDA, Jumbo

Credit score requirement: 620

Average days to close a loan: 30 days

6. Best for In-Person Service: US Bank

Best For

Flexible Mortgages & HELOCs

Minimum Credit Score

N/A

Learn More

More Details

Avg. Days to Close Loan

N/A

Minimum Credit Score

N/A

1 Minute Review

U.S. Bank provides a wide range of mortgage and HELOC products. Mortgages can be conventional, FHA, USDA, VA, jumbo or even designed for investors. You can apply online, reach out to a mortgage broker and get your questions answers as you plan to prequalify or receive a preapproval letter.

When you want to take out a home equity line of credit with U.S. Bank, you can start online, get approved and close in the branch nearest to you. You can take out a HELOC for less, get flexibility in the amount you can borrow and excellent customer service from U.S. Bank.

Best For

• Flexible home equity lines of credit and HELOCs
• Easy online access
• Quick approval

Pros

• Choose how and when to use your HELOC funds
• Applying online helps get the process started faster
• Excellent customer service

Cons

• You must close in a bank branch

US Bank has branches throughout Minnesota, making it a great fit for first time buyers who want to work with someone in person. You can prequalify and start your application online.

US Bank also offers online calculators and educational resources. You can view its rates online, which simplifies your mortgage shopping.

Loan types offered: Conventional, Jumbo, FHA, VA

Credit score requirement: 620 (alternative credit considered)

Average days to close a loan: 44

7. Best for Lender Comparison: Credible Mortgage

Unlike individual mortgage lenders, Credible is a lender marketplace that allows you to compare multiple lenders. You’ll enter basic financial information and get quotes from several lenders on standard home mortgage products. Credible offers a free, fully online mortgage broker service that lets you get quotes from online lenders.

You can find conventional, FHA, VA, Jumbo and refinance mortgage offers. You’ll usually need a credit score in the mid-600s, but it varies by lender. It offers straightforward, convenient service with the possibility of finding the lowest interest rates.

8. Best for VA Loans: Veterans United

Best For

Current Service Members

Minimum Credit Score

620

Get started

More Details

Avg. Days to Close Loan

30

Minimum Credit Score

620

1 Minute Review

Veterans United focuses on VA Loans, which are government-backed loans guaranteed by the U.S. Department of Veterans Affairs to help veterans and active-duty servicemembers buy homes. Veterans United is licensed in all 50 states and the District of Columbia and is the top VA lender in the country. If you’re currently serving or if you’re a veteran, Veterans United is worth considering due to its outstanding customer service and range of mortgage options.

Veterans United’s advisors come from each military branch to ensure it’s taking care of its clients. You can visit its website to learn more about VA loans and the homebuyer process in general and its Lighthouse Program can help you get ready to buy if you’re not quite there yet. It offers strong support if you’ve served our country.

“Nobody handles VA loans better than Veterans United,” says real estate investor Sergio Aguinaga, owner and founder of Michigan Houses for Cash. “Their process is smooth, the support is great and they truly get military buyers. But, of course, the con is that they are only for veterans.”

Best For

• Current service members
• Veterans
• First-time home buyers

Pros

• 24/7 customer service
• Offers VA purchase and refinance loans
• Offers credit consulting through its Lighthouse Program
• Staff from every military branch

Cons

• Only has branches in only 18 states
• Must be a veteran to qualify

If you’ve logged some time in the military, Veterans United’s loans will likely be the best deal. Unlike other veteran-marketed loan programs, Veterans United only accepts active duty and veteran military members.

In addition to no-down-payment loans, you’ll also eliminate the private mortgage insurance you’ll have to pay with other mortgages. 

Veterans United is also more forgiving of lower credit scores. Interest rates are lower than average.

Loan types offered: VA, USDA, FHA, Jumbo

Minimum credit score: 620

Average days to close a loan: 30

The Housing Market in Minnesota: An Overview

Before you find your first home, it helps to know the market. Here’s a brief overview of Minnesota’s housing market:

Total households: 2,322,190

Median list price: $332,600

3 most expensive cities in Minnesota to buy a house:

• Minnetonka Beach: $1,906,195
• Woodland: $1,561,240
• Greenwood: $1,466,319

3 most affordable cities in Minnesota to buy a house:

• St. Cloud: $250,000
• St. Paul: $300,525
• Duluth: $312,700 

Preparing for a Mortgage

The mortgage process might seem mysterious. Here’s how you can get ready:

Review Your Credit

Your credit history plays an important role in the mortgage process. Your credit score, which is a 3-digit computer-generated number, determines whether you can obtain a mortgage. Your credit score and history also determine the interest rate lenders offer you. You don’t need a perfect credit history to get a mortgage, though. You can request a free report from each of the 3 credit bureaus once per year. The simplest way to make that request is through annualcreditreport.com. Review your report and contact the bureau if you see any errors. Many aspects of your credit history impact your credit score, including:

• Whether you’ve paid your bills on time
• How much of your available credit you have used
• The age of your credit accounts
• Whether you’ve had accounts go to a collection agency
• Whether you’ve filed for bankruptcy

Decide on Your Budget

Decide how much you can afford when it comes to a monthly house payment. Your lender might approve you for more than that, but it’s best to stick with what fits your budget. 

Gather Your Documents

Prospective lenders will need to verify your financial situation. Gather together and organize your financial documents, including:

• Your recent bank statements
• Your recent tax returns
• Statements from any other financial accounts
• Pay stubs 
• W-2s and/or 1099s

Contact Lenders

Contact multiple lenders and get a purchase quote. Compare the quotes carefully, keeping an eye on the loan terms. The interest rate may be fixed or adjustable. A fixed-rate mortgage always has the same interest rate and monthly payment. An adjustable-rate mortgage has an interest rate that lenders can change. The length of the mortgage also impacts your monthly rate. Shorter loan terms usually have a higher monthly payment.

Apply for Preapproval

Choose a lender for pre-approval. A pre-approval lets you know how much house you can buy. It also makes your offers stronger when you bid on a house. A pre-approval isn’t a commitment. You can go with a different lender if you choose to. 

Find a Home and Your Lender

Look for a home that fits your budget. Once you find one, have your agent put in an offer. If it’s accepted, choose a lender and start a formal application. 

Lenders typically have a minimum credit score requirement. Here are the minimums for several Minnesota lenders:

Mortgage Options

When you get a mortgage quote, you may see a few mortgage options:

Conventional Loans

A conventional mortgage is a standard mortgage. It doesn’t have any government backing. Conventional mortgages can be conforming or non-conforming. A conforming mortgage meets the standards set by Freddie Mac and Fannie Mae. These two corporations are private mortgage backers that were started by Congress. They help stabilize the mortgage market. Conventional mortgages have price limits and other requirements. 

Jumbo Loans

A jumbo mortgage is a large conventional mortgage. These mortgages typically exceed Fannie Mae and Freddie Mac’s price limits. 

FHA Loans

Many first time home buyers choose FHA mortgages. These mortgages have a low down payment requirement. The Federal Housing Administration (FHA) allows down payments as low as 3.5% for borrowers with credit scores of 580 or higher. Private lenders offer these mortgages and may have higher minimum credit score requirements. 

USDA Loans

USDA mortgages help home buyers with low or moderate incomes to purchase homes in rural areas. The U.S. Department of Agriculture (USDA) oversees this program. You can get a mortgage with no down payment if you qualify.

VA Loans

VA mortgages help current service members, veterans and some surviving spouses to buy or refinance homes. The Department of Veterans Affairs sets the rules for these mortgages. There is typically no down payment requirement and there is no mortgage insurance requirement. 

Private lenders offer all of these mortgages. They must follow the rules when it comes to conforming and government-backed mortgages. 

First Time Home Buyer Programs in Minnesota

Do you need some extra help to buy your first Minnesota home? Here are a few programs that can help:

Start Up Loan Program

This program is available to first time home buyers who meet the income and purchase price limits. You may be able to make a down payment of as little as 3%. It offers fixed-rate mortgages. 

Monthly Payment Loan

This program provides a 10-year loan of up to $15,000 to help with your down payment and closing costs. You must meet income requirements to qualify. 

Deferred Payment Loan and Deferred Payment Loan Plus

These loan programs offer a deferred loan to help with your down payment and closing costs. You don’t need to repay the loan until you sell, refinance or pay off the home. The Deferred Payment Loan is up to $8,000 and the Deferred Payment Loan Plus is up to $10,000. 

The Minnesota Housing Finance Agency offers these programs through lenders it screens and approves. 

Current Mortgage Rates in MN

Your mortgage rate is the amount you pay to borrow the money to buy a home. Lenders set interest rates based on the state of the economy and the housing market. They may offer you a higher or lower rate based on your credit history. Lenders change interest rates daily to reflect market changes. At Benzinga, we update these rates regularly to reflect these changes. 

Here are Minnesota’s interest rates: 

Closing a Mortgage

After you submit your mortgage application, your lender underwrites it. This means it double-checks everything. Lenders often ask for additional information. This takes some time, but eventually, your lender will tell you whether your loan is approved. If your loan is approved, the next step is your closing meeting. This is when you sign your mortgage documents and pay any funds due. 

Here is the average time it takes to close a loan for several Minnesota lenders: 

Finding Your Minnesota Home

Finding the right home — and the right mortgage — takes time. You can get a refinance quote down the road, of course. Look for the best rate from a lender that’s trustworthy and treats you like a valued customer. Choose a home that fits your budget and won’t leave you struggling when it’s time to make your monthly payments. 

Owning a home is an investment. Over time, you build up equity in the home, which you could borrow against if needed. Buying your first home is a big deal. Choose a lender that wants your first home purchase to be a success. 

Frequently Asked Questions

The post Best Mortgage Lenders for First Time Home Buyers in Minnesota by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

To get a VA loan, eligible veterans, active-duty service members, and some surviving spouses must obtain a Certificate of Eligibility (COE) from the U.S. Department of Veterans Affairs.

A VA home loan is a mortgage insured against default by the United States Department of Veterans Affairs.  The VA loans program is designed to assist our most deserving citizens to obtain home financing, at competitive interest rates, while requiring no down payment or private mortgage insurance (PMI).  

If you’re wondering what are the VA loan requirements or how to get a VA loan, follow along as Benzinga breaks down this important topic.

VA Loans: An Overview

VA home loans can be used to:

• Buy a home
• Build a home
• Simultaneously purchase and improve a home
• Improve a home by installing energy-related features or making energy-efficient improvements
• Buy a manufactured home and/or lot
• To refinance an existing VA-guaranteed or direct loan for the purpose of a lower interest rate
• To refinance an existing mortgage loan or other indebtedness secured by a lien a residence occupied by the veteran as a home

Your length of service or service commitment, duty status, and character of service determine your eligibility for specific home loan benefits (see applicable eligibility requirements).  VA-guaranteed loans are eligible for a home for your occupancy or a spouse and/or dependent (for active duty service members).  To be eligible, you must have satisfactory credit and income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE).

Eligibility Requirements

• Veteran, current or former National Guard or Reserve member who has been activated. Federal active service – requires a copy of a DD Form 214 showing the character of service and the narrative reason for separation
• Active Duty Servicemember or current National Guard or Reserve member who has never been in Federal active service- A current statement of service signed by (or by the direction of) the adjutant, personnel office, or commander of the unit or higher headquarters.  It must show your full name, social security number, date of birth, entry date on active duty the duration of any lost time, and the name of the command providing the information.
• Discharged member of the National Guard who has never been activated for Federal active service – NGB Form 22, Report of Separation and Record of Service, for each period of National Guard Service -AND- NGB Form 23, Retirement Points Accounting, and proof of the character of service.
• Discharged member of the Selected Reserve who has never been activated for Federal active service – a copy of your latest annual retirement points statement and evidence of honorable service.
• Surviving Spouse in Receipt of DIC (Dependency & Indemnity Compensation) benefits – Submit VA Form 26-1817 and veteran’s DD 214 (if available).  Include the veteran’s and surviving spouse’s social security number on the 26-1817 form.

Surviving Spouse not receiving DIC benefits – submit the following to the appropriate Compensation and Pension office; VA Form 21P-534-ARE, DD 214 (if available), Marriage License, Death Certificate or DD Form 1300 – Report of Casualty.  Find the mailing address for your state to send the VA 21-534 at PMC States.

Applying for a Certificate of Eligibility

After gathering all the necessary documentation, you can apply for a Certificate of Eligibility (COE) a number of different ways:

• Servicemembers, Veterans, and National Guard and Reserve Members
• Apply online with the eBenefit portal.  
• Apply through your lender.  Most lenders have access to the system, an Internet-based application can establish eligibility and issue a COE.  Not all cases can be processed this way, the VA must have sufficient data on record.
• Apply by Mail. Use VA form 26-1817, Request for Certification of Eligibility.
• Surviving Spouses

Take a VA Form 26-1817 to the lender for processing or mail the 26-1817 and the DD 214 (if available) to the designated address.

Loan Criteria

Perhaps the greatest advantage of VA home financing is the ability to avoid mortgage insurance while requiring no down payment at the same time. In fact, loans can be granted up to 103.3% Loan to Value (LTV) is the lessor of the sales price/ appraised value divided by the loan amount expressed as a percentage), meaning that borrowers can borrow more than 100% of the value of their home.

Though VA loans do not require VA loan mortgage insurance, they do carry a funding fee of 3.3% of the loan amount. The fee is financeable at a borrower’s request, which is the purpose of allowing eligible veterans to borrow 3.3% more than their home’s value.

Disabled veterans are exempt from the funding fee based on their percentage of disability. Bear in mind, with all mortgages there are closing costs to consider aside from your down payment, like origination fees, title fees, escrow deposits, etc. Unless covered using existing equity or by seller concessions, these costs will have to be paid by borrowers at the closing table.

Among the VA loan house requirements are that you can afford the monthly payment. Depending on the VA loan rates today, your mortgage can vary. The best way to determine what yours will be is to use a VA home loan mortgage calculator.

Required Documentation

• Income documentation: W2s & pay stubs (if hourly/ salary), 2 years tax returns (if commission/ self employed)
• Asset documentation (itemized statements for savings, checking, or investment accounts)
• Property sales contract
• DD214 or Certification of Guarantee
• Certificate of Eligibility

Where to Apply

The Department of Veterans Affairs does not originate VA loans they simply write the program guidelines. To obtain a VA mortgage, you will need to find a VA approved lender.

Smaller community or regional banks may also offer VA loans so checking websites or placing a phone call can determine if they offer a VA loan product. When speaking to VA lenders, it is best to have all the necessary documentation ready.

This will give you the quickest and most accurate gauge of your qualifications. If you can’t garner the necessary docs beforehand, not to worry. Most loan officers should be able to point you in the right direction.

Find the Best VA Home Loans with Benzinga’s Top Lenders

Explore our selection of top VA loan providers and discover which one suits your needs the most.

Financing Your Dream Home

Understanding the ins and outs of how to get a VA loan is crucial for veterans and active-duty service members looking to buy a home. By following the necessary steps and meeting the requirements set forth by the Department of Veterans Affairs, you can benefit from lower interest rates, no down payment requirements, and no private mortgage insurance.

Frequently Asked Questions

The post How to Get a VA Loan by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.

Yes, Rocket Mortgage is safe to use.

If you’ve never applied for a mortgage online before, it makes sense to be cautious. After all, you have to provide a lot of personal and financial information when applying for a mortgage. 

Is Rocket Mortgage® safe to use? Let’s take a closer look. 

Is Rocket Mortgage Safe to Use?

Rocket Mortgage® is the online platform of Quicken Loans. Rocket Mortgage® has industry-recognized safeguards to protect your data. It also has internal and external security experts review its security protocols regularly to ensure it stays up-to-date. 

It provides clear information on what data it collects and how that data is used. You can also contact Rocket Mortgage if you have any questions about privacy or security at Assist@RocketMortgage.com or by calling its mortgage hotline at (800) 863-4332.

Applying Online with Rocket Mortgage

You can access the Rocket Mortgage® platform online or by using the Rocket Mortgage® app. 

Preapproval

The 1st step is to apply for mortgage preapproval. This lets you know how much you’re approved for. You’ll need to answer questions about your income, savings, and the type of home you’re looking for. You also give Rocket Mortgage® permission to view your credit report. 

Rocket Mortgage® will review the information, and if you’re preapproved, it will provide you with a few mortgage options like fixed-rate or adjustable-rate mortgages and the amount you’re preapproved for. You’ll also see information on the interest rates, loan types (Freddie Mac, Fannie Mae, FHA, VA, USDA, etc.), monthly payments, and down payment requirements. 

Next, you’ll choose 1 of the mortgage options and get a Prequalified Approval Letter. If you want stronger approval, you can contact a Rocket Mortgage® expert and apply for a Verified Approval. 

To get a Verified Approval, you’ll need to provide Rocket Mortgage® with documentation confirming your income and assets. Otherwise, these documents are provided later in the process. If you’re in a competitive housing market or want to feel more confident in your status before you start home shopping, you may wish to pursue a Verified Approval. 

Find a Property

During this period of time, you can begin to look for a home. The best thing you can do is find a property that fits your budget and your needs. The best way to do this is to work with a reputable real estate agent. Your agent can help you put an offer on the home. Once your offer has been accepted, it’s on to the next step. 

Finding the right home on your mortgage journey should lead you to financial freedom—not ruin.

Underwriting

If you didn’t get a Verified Approval, Rocket Mortgage® will need to verify your financial information. Regardless of whether you got a Prequalified Approval Letter or a Verified Approval, Rocket Mortgage® will need to verify your property’s details. This typically involves ordering an appraisal, which is when a 3rd party confirms the value of the property you’re buying. It will also confirm the title is in good standing.

You will also learn about how much mortgage insurance will cost and what the current mortgage rates are. If you think the rates cannot get any better, you may want to lock in your rate while you can.

You’ll also need to schedule any required home inspections. Even if it’s not required, a home inspection is a good idea. Once underwriting is finished and your loan is approved, you’ll receive your closing documents. 

Closing

This is the final step. You’ll review your closing documents to confirm the information, then schedule a meeting to sign all your documents and pay your down payment and closing costs. Once everything is signed, the home is yours. You will find out what your private mortgage insurance will cost, the exact amount of property taxes, and the total monthly mortgage payment.

Rocket Mortgage Rates and Fees

Rocket Mortgage® rates and fees vary depending on the type of mortgage, the amount of the mortgage, your credit score and history, whether there are seller concessions and other factors. The average closing costs for a loan are 3% to 6% of the loan amount. When you apply for a mortgage and get your loan disclosure, you will get a breakdown of all the fees. 

Mortgage rates change daily. You can view today’s mortgage rates on the Rocket Mortgage® website. Keep in mind that you may be offered a different interest rate based on your financial situation. 

Rocket Mortgage Options

Here are the home loans available with Rocket Mortgage through Quicken Loans. 

Federal Housing Administration (FHA) Loans

The Federal Housing Administration backs FHA loans. It has lower credit score requirements than other types of mortgages and a low down payment requirement. If you have a credit score of 580 or higher, you can make a 3.5% down payment. These loans have limits, however, based on where you live. 

Fixed-Rate Mortgage

A fixed-rate mortgage has the same interest rate for as long as you have the loan. The principal and interest portion of your monthly payment will always be the same.

Veterans Affairs (VA) Loans

The Department of Veterans Affairs guarantees VA loans. These loans are for qualified service members and veterans. They typically have low interest rates, flexible credit requirements and no down payment requirement. 

Jumbo Loan 

Conventional mortgages can be conforming or non-conforming. Conforming mortgages have a limit set by the Federal Housing Finance Agency (FHFA). Jumbo mortgages are home loans that exceed those limits. There may be higher interest rates than conforming loans and stricter requirements to qualify. 

Adjustable-Rate Mortgage

An adjustable-rate mortgage is a home loan with a rate that Rocket Mortgage® can change. These loans typically start with a fixed rate for a period, and then Quicken Loans can adjust the interest rate on a predetermined schedule. 

The initial interest rate is typically lower than a fixed-rate mortgage. Quicken Loans will use a benchmark to determine whether your interest rate will change and how much it will change, and all of that will be clearly spelled out in your loan documents. 

YOURgage

YOURgage® is unique to Rocket Mortgage®. It’s a fixed-rate mortgage with a term that you choose. It can last anywhere from 8 to 29 years. This home loan has a 3% down payment requirement, requires a credit score of 620 or higher, and a debt-to-income (DTI) ratio of 50% or less. 

Your DTI ratio compares your monthly debt payments, including your potential mortgage payment, to your income. You’ll also need the funds to cover the closing costs. 

Refinance

A refinance is when you replace your current mortgage with a new one. Homeowners may refinance to get a better interest rate, change their mortgage term, or cash out equity in their home. Rocket Mortgage® can help you refinance into a new mortgage. 

Alternatives to Rocket Mortgage

Here is how Rocket Mortgage compares to other online lending platforms. 

Is Rocket Mortgage Right for You?

Rocket Mortgage® makes the mortgage application process easy. You can apply online or using your phone and choose a Quicken Loans mortgage solution that meets your needs. It’s also among the best mortgage lenders for the self-employed. The Rocket Mortgage® platform is absolutely safe to use. 

Frequently Asked Questions

The post Is Rocket Mortgage Safe to Use? by Melinda Sineriz appeared first on Benzinga. Visit Benzinga to get more great content like this.