Buying a new home is one of the most exciting and significant investments you’ll ever make. With the wide variety of home styles, price ranges, and amenities on display at this year’s Parade of Homes, you may be wondering which financing option will best suit your budget and long-term goals. Let’s take a look at some of the most popular financing solutions available to today’s home buyers.

1. Conventional Loans

Conventional loans are the most common choice for homebuyers. These loans are not insured by the government, which means lenders typically have stricter requirements. However, they also offer more flexibility in terms of loan amounts and terms. If you have a solid credit score and a decent down payment (typically 5-20%), a conventional loan may be your best bet. Conventional loans often come with fixed or adjustable rates, allowing you to choose the option that best fits your financial situation.

2. FHA Loans

The Federal Housing Administration (FHA) provides loans that are insured by the government. With down payments as low as 3.5%, FHA loans make homeownership accessible to a wider range of people. These loans do come with mortgage insurance premiums, but they’re a great option if you’re just starting out or need a bit more flexibility with credit and down payment requirements.

3. VA Loans

For veterans, active-duty service members, and certain members of the National Guard or Reserves, VA loans are an excellent option. Backed by the U.S. Department of Veterans Affairs, VA loans often offer 100% financing, meaning no down payment is required. They also may come with lower interest rates and do not require private mortgage insurance (PMI), which can result in significant long-term savings.

4. USDA Loans

If you’re looking to buy a home in a rural area, a USDA loan may be the perfect fit. Backed by the U.S. Department of Agriculture, these loans are designed to promote homeownership in rural communities. Like VA loans, USDA loans can provide 100% financing with no down payment, and they also may have competitive interest rates. While the northern Miami Valley has a mix of suburban and rural areas, you might find that some of the homes featured in the Parade of Homes qualify for this type of financing.

5. Construction Loans

For those looking to build their dream home, a construction loan is a specialized option that can finance both the land and construction. These loans typically have higher interest rates and require a more substantial down payment (around 20%), but they provide the flexibility needed for new construction projects. After the home is completed, you can often convert the loan into a standard mortgage. If you’re drawn to the new subdivisions showcased in this year’s Parade, a construction loan could help turn your vision into reality.

6. Bridge Loans

If you’re already a homeowner and want to purchase a new property before selling your current one, a bridge loan could provide a short-term financing solution. These loans “bridge” the gap between buying your new home and selling your current one, giving you access to funds for a down payment without having to wait for the sale. Once your existing home sells, the proceeds can be used to pay off the bridge loan.

7. Fixed vs. Adjustable-Rate Mortgages (ARMs)

As you explore loan options, you’ll also need to choose between a fixed-rate and adjustable-rate mortgage (ARM). A fixed-rate mortgage locks in the same interest rate for the entire term of the loan, giving you consistent monthly payments and long-term stability. This is a great option if you plan to stay in your home for many years.

An ARM, on the other hand, starts with a lower interest rate for a set period (usually 5, 7, or 10 years), after which the rate adjusts periodically based on market conditions. If you’re considering an ARM, it’s important to think about how long you plan to stay in the home and whether you’re comfortable with the potential for future rate increases.

With so many financing options available, it’s essential to find a solution that meets both your current financial needs and long-term goals. Whether you’re an entry-level buyer, upgrading to your dream home, or planning to build a custom house, there’s a mortgage product to help make your homeownership journey a reality.

Be sure to speak with local lenders—like our Parade of Homes presenting sponsor, Minster Bank, or any of our member banks, to get personalized advice and explore all your options. With their expertise, you can confidently take the next step toward securing your new home in the beautiful northern Miami Valley. To find a local lender to help you realize your dream of homeownership, visit www.westernohiohba.com