Types Of Mortgages

First Time Homebuyers

There are many different options that first time homebuyers have access to. Whether you are limited with savings, income, or credit it's important to look into every option to see what fits your needs the best. This is one of the biggest purchases you will ever make so it’s important to learn about the programs below. 


FHA

FHA is an outstanding mortgage program and is a crucial tool that gives the ability of homeownership to many first time homebuyers. Since many first time home buyers are younger and just starting a new chapter of their lives they are limited in savings and income.

 

Some of the benefits of FHA are;

  • FHA has a lower down payment requirements compared to conventional. While conventional has a minimum of 5% down and in many cases more is needed FHA allows for only 3.5% down. 
  • FHA has flexible credit requirements and will tolerate some scratch and dent items on credit.

 

If you’re a first time homebuyer than the FHA program may be the best option for you. Since there is a lot more information regarding the FHA program it’s important to talk to your realtor about them and ask questions. 


Conventional

Conventional mortgages are mortgages that are not insured by the government. They have a higher minimum down payment and require stronger credit and more income compared to debt ratio's. Mortgages with a down payment ranging from 5% - 19.9% requires Private Mortgage Insurance (PMI) and mortgages with 20% or more down does not require PMI.

 

Some key features of Conventional Mortgage are;

  • Minimum down payment of 5% down
  • 5%-19.9% down requires PMI (The more you put down the less the monthly PMI would be)
  • Stronger credit required

 

If you feel you have more money to put down than a Conventional loan may be the right choice for you. It’s important to talk to your realtor about it and ask questions.


SONYMA

SONYMA is a NYS program that has various mortgage program designed to assist first time homebuyers. They only require 3% down and offer down payment assistance programs to make is 100% financing. They also have a program that does not require any monthly PMI.

Some of the features include;

  • Only 3% down payment required with full down payment assistance making it 100% financing
  • No monthly PMI 
  • Only requires 1% of borrower own funds

 

There are other guidelines that the borrower must meet however this program is a great program for those who have access to it. Be sure to discuss this with your realtor and ask questions.


VA

The VA loan program is guaranteed by the US Dept of Veterans Affairs and is offered to veterans and surviving spouses. There is no down payment required and veterans can finance the entire purchase price.  In addition there is no monthly PMI.

Some the features include;

  • 100% financing (no down payment required)
  • No monthly PMI

This is a great mortgage program for veterans to take advantage of and may be the best choice for you. It’s important to talk to your realtor and ask questions. 


203K

A 203(K) loan is through the FHA and is very similar to the traditional FHA 203(B) mortgage however it allows you to build in renovations into the loan. Compared to other construction loans this loan program builds in the costs of renovations into one low 30yr fixed rate.

Some of the features include;

  • Only 3.5% down required
  • Include renovations and home upgrades
  • No maximum renovation amount
  • Oversee your own project and work done
  • One low 30 yr fixed and/or adjustable rate mortgage

This may be a great mortgage option if you find the perfect house in the perfect location but needs updating. It’s important to talk to your realtor and ask questions.