Comparing Colorado Conventional, FHA, and VA Mortgages
Conventional Mortgage: With the proper credit and financial profile, just about anyone is eligible for a conventional mortgage. Although many homebuyers believe they need a ten to twenty percent down payment, there are conventional mortgage solutions that allow for zero down, even zero down with no mortgage insurance.
Conventional mortgages are all underwritten using the same guidelines (they don't change from lender to lender) based on the rules issued by Fannie Mae and Freddie Mac. Each solution offers a slightly different set of advantages and disadvantages. Working with a mortgage consultant with access to, and knowledge of, both conventional solutions can be an advantage to the buyer.
FHA Mortgage: Many times referred to as a first time homebuyer program, FHA can be used to buy a first or tenth home. FHA is much more about helping homebuyers get into a home with a minimum down payment (the source of funds rules are much more flexible as a rule allowing for a gift of the down payment, for example)), without strict credit requirements (as a rule, FHA is much more flexible on credit than conventional mortgage solutions).
FHA also has provisions for "kiddie condo" solutions. This term is used to describe parents who help a child buy their first home. Typically the child is in school, but this isn't necessary.
FHA underwriting rules are the same from lender to lender, although a complete understanding of what FHA allows is not a forgone conclusion when talking with someone who originates FHA mortgages. Not every lender is approved to originate FHA loans. As always, it pays to work with a mortgage consultant who knows what they're doing, and who has access to a wide range of mortgage solutions.
VA Mortgage: You must be eligible for a VA loan to even be considered for this mortgage solution. If you know what a DD-214 is and you have one, you're probably well on your way. Military service of a qualifying length is the key to having VA eligibility. Check the VA's web site for more information about eligibility.
VA is a zero down mortgage solution that does not require mortgage insurance - at market rate for government insured loans. VA is the ultimate zero down solution.
VA underwriting rules don't change from lender to lender, though just as with FHA, not every lender is able to provide VA loans.
For More Information: How much do I qualify for? Overview of the mortgage process. Down payment assistance.
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