Loan Programs Financing your First Home My team works with many neighborhood, city, county, state and federal non-profit providers of affordable lending programs for 1st Time Buyers. These can save you thousands of dollars and give you a real advantage over programs offered by other lenders. We have dedicated an entire section of our website to Down Payment Assistance and Low Interest Loans for 1st Time Buyers. Please check out the DPA/1st TB Programs section of our site to find a program that is right for you. |
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Fixed Rate Mortgages
- Your monthly payments for interest and principal never change.
- Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable.
- Available in 10,15,20,25, and 30 year terms
- Fully amortizing meaning that the payments are level for the life of the loan and are structured to fully repay the loan by the end of the loan term.
- You can make extra principal payments and pay the loan off early by doing so but the payment will not change during the repayment term.
Adjustable-Rate Mortgages - The interest rate changes at specified intervals (for example, every year) based on an index plus a margin which is established when you sign up for this type of loan.
- Often the initial rate is lower than that of a fixed rate and can make this an attractive loan for someone who is not planning on staying in a house for a long period of time.
- There are also mortgages that combine aspects of fixed and adjustable rate mortgages - starting at a low fixed-rate for seven to ten years, for example, then adjusting to market conditions.
- Ask your mortgage professional about these and other special kinds of mortgages to find one that fits your specific financial situation.
FHA Mortgage - Insured by the Federal Housing Administration since 1934
- You do not have to be a first time buyer to use this program
- Allows a borrower to put as little as 3.5% down
- The down payment and closing costs can be funded by a gift from a family member, a grant program or a loan from an approved non-profit agency.
- Sellers can pay an amount equal to 3% of the purchase price towards the buyer’s closing costs
- Reasonable purchase price limits are set by the FHA for each Metropolitan area. Ask your lender what the maximum purchase price is for your area.
- Credit scores do not have to be quite as high as for a conventional mortgage
FHA 203k Streamlined Rehab loan - Just like a standard FHA loan, this is a regular fixed rate mortgage that allows a buyer to finance up to an additional $35,000 into their mortgage to cover needed repairs, or desired improvements.
- You do not need to be a first time buyer to qualify.
- The standard FHA maximum mortgages requirements apply.
- The repairs or improvements can be things such as insulation, plumbing repairs , a new furnace, new windows, new siding, a roof or perhaps new kitchen cabinets or flooring. The best news is the down payment requirements for purchase are the same as they are for a standard FHA loan. We’d be happy to provide a complete list of eligible improvements.
- With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser and put all of the costs into their mortgage.
- Down Payment is still 3.5% of purchase price.
- A seller can pay up to 3% of the purchase price toward the buyer’s closing costs and prepaid items.
- This can be a very economical choice for the buyer who wants to purchase a house that needs some TLC but doesn’t have an extra pile of cash laying around for repairs.
- Can be used with a refinance as well. VA Mortgage
- This is a benefit program for eligible Veterans
- No down payment is required in most cases
- There is no monthly mortgage insurance which keeps payments lower
- The VA sets reasonable credit underwriting guidelines to assist Veterans in purchasing a home and they are often more flexible than is the case with other programs.
Conventional Mortgage - Typically for borrowers with credit scores in the mid 700’s
- Down payment requirements are higher than for FHA or VA loans and currently vary based on market conditions. Typically buyers using this type of mortgage are putting 10-20% down.
- The maximum loan limit for this type of mortgage is typically higher than that of an FHA mortgage and currently is at $417,000.
Conventional Mortgage
- Typically for borrowers with credit scores in the mid 700’s
- Down payment requirements are higher than for FHA or VA loans and currently vary based on market conditions. Typically buyers using this type of mortgage are putting 10-20% down.
- The maximum loan limit for this type of mortgage is typically higher than that of an FHA mortgage and currently is at $417,000. Information regarding Construction Loans for Building and Remodeling
- This is a short term loan, typically for 6 months, used to build a new home or substantially remodel a home.
- Payments are based on the balance used and calculated monthly. Since this is a short term loan, the payments are generally interest only.
- The borrower uses the proceeds of the loan to pay the Builder or Remodeler an established number of draws during the construction process.
- Once the construction is complete, a permanent loan is put in place that pays off the construction loan. Reverse Mortgages
- Must be 62+ to qualify for this program designed to help Seniors stay in their homes
- Payments are made by the lender to the borrower, in reverse, and the size of the payments is dependent upon many factors including how much equity there is in the home, the borrower’s age, current interest rates, and other factors.
- Borrowers usually have a choice of receiving the proceeds from a reverse mortgage in the form of a lump-sum payment, fixed monthly payments for life, or line of credit.
- The interest rate charged on a reverse mortgage is usually an adjustable rate that changes monthly or yearly. However, the size of monthly payments received by the senior doesn't change.
- Seniors do not have to meet income or credit requirements to qualify for a reverse mortgage.
- The repayment obligation for a reverse mortgage is equal to the principal balance of the loan, plus accrued interest, plus any finance charges paid for through the mortgage. This repayment obligation, however, can't exceed the value of the home.
- In general, a borrower can't be forced to sell their home to repay a reverse mortgage as long as they occupy the home, even if the total of the monthly payments to the borrower exceeds the value of the home.
- This is a complex financial tool and you should talk with us in depth to see if a reverse mortgage can help you “age in place” more affordably.
