Mortgage Knowledge is a Home Buyer's Power

     I'm willing to bet that most people would say they’d prefer to own their long term home, rather than leasing it. However, according to doorloop, only a little more than half (66%) of the population are homeowners in America, leaving 34% of the population to be renters. There are many reasons why a person may choose to rent, but it’s not a secret that when it comes to buying a home, many people just don’t know where to start. It’s one of the biggest financial commitments a person will make in their lifetimes, and especially for first time buyers, the whole ordeal can be a little daunting. One of the main first questions is : How do I get the financing? 

     When it comes to choosing the right mortgage loan, it’s important to explore a few different options to make sure that you’re getting the best terms that suit your lifestyle and credentials. Many people are simply unaware of how many different types of loans are out there and what they actually need to show to qualify. I am willing to bet that many people who want to buy a house believe they can't qualify or afford a home because they just don’t know what to look for. We want to see that paradigm shift, and get more Americans into their own homes. Did you know there are loans out there that require as low as 0% down... There are even downpayment assistance programs (for qualifying buyers)! So there’s really no need to hesitate. You can start looking into it today, and start to see what mortgage option is best for you and learn what it will take to get you over that threshold and into your dream house.

To get you started... We put together a brief synopsis of a few different loan programs that are available out there:

Government Backed Loan Programs:

FHA Loans

     3.5% down is the usual down payment, though there are other options, depending on which lender you choose. These are for primary residence purchases only. There are loan limits determined by the county you live in. Interest rates are often lower than the rates offered for conventional loans. Though due to their long-term MIP (Mortgage Insurance Premium - ask your lender for details!), you may end up paying more over the life of the loan.

If you want to check out today's "prime" rates, here's a great website resource:

Mortgage News Daily

VA Loans

     A loan available for veterans and some qualifying widows of veterans that has some of the highest purchase price coverage a person can attain. If you're a veteran, this is an amazing program! You can put 0% down and not have to pay the pesky MIP that's required with FHA. And usually, FHA & VA have similarly low rates.

USDA Loans

     Many people don’t associate the USDA with home loans, but this government program also guarantees loans to help support low income families looking to buy in rural areas. And rural doesn’t have to be out in the middle of nowhere. There are even some "Asheville" addresses that qualify! Nearly every surrounding town (currently) meets USDA eligibility requirements. And here's the best part... this is one of the only 0% down payment options for non-veterans! You do need to be creditworthy and make stable, provable income... and there are income limits to discuss with your lender if this sounds like a great option for you!

 

*Government loans sometimes require sellers to make repairs based on appraiser concerns. We're happy to go over all pros & cons with you when the time is right!*

Conventional Loans:

     This is the type of loan that most people think about when they consider buying a home. These loans are not backed by any government programs and are issued through banks, credit unions and mortgage companies. Their qualification standards are higher. Conventional loans are typically provided by private entities with no government guarantee of being paid back. Many buyers think you have to put 20% down to get a conventional loan, though that's simply not true. Commonly, mortgage providers require a minimum of 3% down for conventional loans (the most competitve loan type when submitting offers), though we recently partnered with Whitley Mortgage to offer a 1% down option!! 

CONVENTIONAL 1% DOWN

With an almost unheard of 1% down, this mortgage is available to buyers who make 80% or below of their area’s median income (AMI). You still need a credit score of 620 or higher and the loan must go towards your primary residence. This isn’t a great option if you’re looking at top dollar houses but it’ll definitely get you into a cozy new home that you can call your own. 

Here are some of their other options:

HOMEONE®

This mortgage is for first-time homebuyers and requires as little at a 3% down payment solution. There are no income restrictions and available in all areas, even the city centers. There are no income restrictions but you need to prove credit worthiness. A great option for condos, townhouses, or single family residences, including manufactured homes.

 

HOME POSSIBLE®

Another option that offers up to 97% financing for qualifying buyers that meet at least a 620 FICO credit score. It’s available for first time homeowners as well as move-up borrowers and retirees alike. This mortgage is also suitable if you’re looking for a refinance even with low equity currently in your home. You can even use this loan for buying into co-ops!

 

Here is a link to their website if you want to learn more about them: https://www.whitleymortgage.com/

 

     With mortgage interest rates dropping below 7%  (compared to 7.91% in October) and several more rate cuts predicted this year, 2024 might just be a great year to buy your new house! With lowered rates, options for down payment assistance and great resources for financing investment deals - there's no longer a reason to wait! Reach out to us as soon as you're ready to start exploring more in depth what loan options are best for you - and we'll get you linked to the right experts to help you out!