Buying a new home in central Indiana? Here are eight home-loan options to consider during the spring home-buying frenzy.

Spring means flowers, warmer temperatures … and a home-buying frenzy. That’s because the busiest months to buy or sell a home are typically April, May and June. And whether you’re a seasoned house-hunter or a first-time buyer, it’s important to know your home-loan options before you begin the process.

So, what are the main types of home loans, and which one is right for you? We’ve got you covered.

Eight Common Types of Home Loans

Fixed-Rate Loan. The most common type is a fixed-rate (or conventional) loan, which means there is a single interest rate (and monthly payment) for the life of the loan, which is typically 15 or 30 years. This type is perfect for homeowners who want predictability, and plan to stay in one place for a while. We offer a wide range of conventional loans with low rates and flexible terms.

Federal Housing Administration (FHA). FHA loans fixed and adjustable rate loans backed by the Federal Housing Authority (FHA) in the Department of Housing and Urban Development (HUD). This is good for the lender because the government insures the loan. They can allow for a lower down payment – sometimes as little as 3.5% (typical loans usually require 20% of the purchase price of the home). This type of loan is usually a good fit for those who have little savings or poor credit. It’s also a good option for those who are just starting out, or in the middle of a significant life transition.

Veterans Affairs (VA) Loan. If you have served in the United States military, a Veterans Affairs loan might be the perfect option for you. If you qualify, this type of loan offers Veterans special benefits, like no down payment or monthly mortgage insurance. In addition, closing costs that can be paid for by the seller. There are specific requirements, however, on the type of home you can purchase: it must be a primary residence and meet a specific set of criteria.

JUMBO Loan. A jumbo mortgage is a home loan for an amount that exceeds conforming loan limits established by regulation. The jumbo loan limit is $417,000 in most of the United States. The limit on jumbo loans is $625,500 in the highest-cost areas. We offer financing options for up to $2.5 million.

USDA Loan.  While USDA loans are designed for families in rural areas, they are also available for suburban homebuyers. The government finances 100% of the home price (which means a down payment isn’t necessary), and interest rates are discounted. Other benefits include flexible credit guidelines, and there is no maximum purchase price limit.

Reverse Mortgages.  This type of loan is for seniors at least 62-years-old, and requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner’s insurance. This option allows elders to access the home equity they have built up in their homes, and defer payment of the loan until they die, sell, or move out of the home. Because there are no required mortgage payments on a reverse mortgage, the interest is added to the loan balance each month.

Investment Property Loan.  Perfect for those who invest in real estate, investment property loans offer a variety of financing options for properties from one to four residential or vacation units at a 30-year fixed rate.

Home Equity Loan. This is a convenient way for current homeowners to borrow money to pay for things like education expenses, home improvements, medical bills or debt consolidation. The loan amount is determined by the value of the property, and the value of the property is determined by an appraiser from the lending institution.

Ready to Get Started?

We know that the home-buying process can be overwhelming. When it comes to your financial needs – and determining which home loan is right for you – we can help. Contact a loan officer to set up an appointment at your nearest Family Horizons Credit Union today, or call (317) 352-0423.