First time home buyers are most likely to go for a conventional home loan. This loan offers a fixed interest rate for the life of the loan, and the terms can vary from 15 to 30 years. Down payments can be as low as five percent with private mortgage insurance. This group often has time on their side so thirty years isn't too daunting, likewise they haven't had as long to save up a down payment so the five percent down is appealing.
Folks likely to move or refinance in three to five years may be attracted to an adjustable rate mortgage. This mortgage starts with a low interest rate, and is fixed for a specific period of time. Once the term, such as a 5:1 ARM (30 year loan with the rate fixed for 5 years) expires, your interest rate is subject to go up or down based on the current interest rate at that time.
In today's market, there are many that have purchased a home through a short sale or foreclosure. Many of these homes are typically in need of repair. For borrowers who are considering purchasing this type of home, a 203K Repair & Restore home loan program from Poli Mortgage Group may be the answer. The 203K loan program provides borrowers money to fix up, renovate, repair, replace or remodel a home in addition to the mortgage value. Terms and interest rates vary with this loan.
An FHA loan, (Federal Housing Authority) is a Government insured loan allowing home financing for borrowers with down payments as low as 3.5%. This loan is available to anyone, but you must have decent credit, not excellent, but decent, and there are limits on how much you can borrow. The FHA charges an up-front private mortgage insurance (PMI) premium which is 1.75%, which can be financed into the mortgage amount or paid in cash at the time of settlement. The borrower must also pay a monthly mortgage insurance payment of 1.25%, which is collected monthly.
Another type of loan rewards those that have served our country. This is the Veteran's Administration (VA) loan.
A VA loan is available to qualified veterans of the Armed Services, Reserves and National Guard. These loans can exceed $200,000 with no down payment, require no private mortgage insurance, and have flexible underwriting guidelines. Closing costs can be a gift, and this loan can be combined with a second mortgage.
MassHousing Mortgage products are backed by the state's affordable housing bank and are a great option for qualifying first time homebuyers. These loan programs allow for those with low to moderate income the ability to purchase a new home or refinance an existing home.
MassHousing loans are fixed rate programs and have low down payment options along with competitive interest rates. These programs can be used for a single family home or a two to four family home.
Income limits for MassHousing loan programs vary by city/town and by household size.
There are as many loan options as there are people buying and selling homes. Chances are there is a loan that is right for you; it's simply a matter of asking the right questions and finding the right vehicle for your home buying success.