A primary residence is the main home someone inhabits. Your primary property can be an apartment, a houseboat or another form of property that you live in most of the year.
Primary residences tend to qualify for the lowest mortgage rates. For your home to qualify as your primary property, here are some of the requirements:
- You must live there most of the year.
- It must be a convenient distance from your place of employment.
- You need documentation to prove your residence. You can use your voter registration, tax return, etc.
Mortgages on vacation homes often require higher down payments and may have higher interest rates and property taxes, depending on the location.
Investment Property is real estate property purchased that you own exclusively for generating rental income and/or for an eventual profit on its sale.
A Conventional Loan allows you low down payment options on a primary residence or secondary home/investment property; options with or without mortgage insurance.
An FHA Loan is available on a primary residence specifically and it doesn’t require the traditional down payment of 20 percent. It does require minimum mortgage insurance and only asks for minimum work history.
Rural Development (RD)
A Rural Development Loan is available on a primary residence and has a no down payment option. It is possible to finance in closing cost based on appraised value, with area and income restrictions that apply.
The VA Loan requires that you must qualify for Veterans benefits, and with this loan there are zero down payment requirements, as well as no mortgage insurance required.