Conventional, FHA, VA, and USDA Mortgages

There are several differences between conventional, USDA, FHA, and VA mortgages, including:

Conventional mortgage

A conventional mortgage is a type of mortgage that is not insured or guaranteed by the government. These mortgages are typically offered by private lenders, such as banks or credit unions, and require a higher credit score and a larger down payment than other types of mortgages. The borrower is typically required to pay for private mortgage insurance (PMI) if they put less than 20% down. Down payments on conventional loans can be as low as 3%.

USDA mortgage

A USDA mortgage is a type of mortgage that is guaranteed by the United States Department of Agriculture. These mortgages are designed to help low- and moderate-income homebuyers purchase homes in rural areas. USDA mortgages typically require no down payment and have lower interest rates than conventional mortgages. However, borrowers are required to pay for mortgage insurance.

FHA mortgage

An FHA mortgage is a type of mortgage that is insured by the Federal Housing Administration. These mortgages are designed to help low- and moderate-income homebuyers purchase homes with a lower down payment and credit score requirements than conventional mortgages. FHA mortgages require mortgage insurance premiums (MIP) to be paid upfront and throughout the life of the loan. Down payment for a mortgage loan can be as little as 3.5%.

VA mortgage

A VA mortgage is a type of mortgage that is guaranteed by the Department of Veterans Affairs. These mortgages are designed to help eligible military service members, veterans, and their families purchase homes with no down payment and no mortgage insurance requirements. VA mortgages typically have lower interest rates than conventional mortgages.

The differences between these mortgages include the type of lender, down payment requirements, credit score requirements, mortgage insurance requirements, and interest rates. Homebuyers should research each type of mortgage to determine which one is best for their financial situation and homebuying goals.

About Niki Maclay

Niki Maclay knows the upstate of South Carolina. As a real estate agent, her first priority is to make her clients’ next steps as smooth as possible. Niki loves to answer questions and make sure clients know exactly what’s happening at every stage of the home buying and selling process, she specializes in helping people transition into homes that best meet their needs through every stage of life. Even beyond the transaction, the relationship Niki builds with her clients matters. Her relationship with buyers and sellers doesn’t end at the closing table. Niki is honored to call former clients “friend” all over the upstate. In her free time she enjoys sand and surf, home improvement projects, nice cars, great music, science fiction, and good eats all over the southeast.

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