A Guide to Ideal Mortgages in Long Island for First-Time Homebuyers
- Lakeview Mortgage Bankers
- Jul 21, 2022
- 3 min read
Updated: Sep 15, 2022
Many programs and grants are available to first-time homebuyers can help make homeownership a reality. Choosing the loan type of mortgage can make a huge difference when it comes to your upfront and monthly payments.when it comes to your upfront and monthly payments.
For most Long Island residents, securing a mortgage is a crucial step in the home buying process. With so many different options available, choosing the right type of loan can be overwhelming specially for Long Island Mortgages.
By completing some research, you may have a better idea of what kind of loan would be best for you, but the best way to ensure a successful loan is by contacting a mortgage loan originator.
Conventional Low Down Payment Mortgages
These conventional loans come with a down payment of less than 20 percent. They're popular because they can make buying a home more affordable. But they do come with some risks. For one, you'll have to pay private mortgage insurance (PMI) if your down payment is less than 20 percent. And your monthly mortgage payments could be higher because you're borrowing more money.
Fannie Mae and Freddie Mac are organizations that help set the guidelines for conventional loans. These loans are available to borrowers with a strong credit score and a minimum down payment of 3 percent. These programs can be a good option for those looking for an affordable way to finance their home.
The Conventional 97 mortgage is a government-backed mortgage that helps make purchasing a home more affordable for people with a lower down payment. With this mortgage, borrowers only need to put down 3 percent, but they must have a credit score of 620 or higher. Borrowers also have to pay for private mortgage insurance (PMI) with this mortgage, an extra cost added to the monthly mortgage payment.
Fannie Mae's HomeReady mortgage program requires only 3 percent down and offers more flexible underwriting.
Freddie Mac's Home Possible mortgage program enables borrowers to purchase a home with a small down payment and is similar to the HomeReady mortgage program offered by Fannie Mae. The minimum down payment for a Home Possible mortgage is 3 percent.
The HomeOne mortgage from Freddie Mac allows homebuyers to put down just 3 percent when buying a home, as long as they have private mortgage insurance (PMI). This mortgage is only available to first-time homebuyers, and some other special criteria must be met to qualify.
Conventional Low Down Payment Government Mortgages
Government loans are mortgages supported by a government agency. The government agency will pay the lender back if you default on payments. Approved mortgage lenders offer these loans throughout the United States. Some lenders specialize in certain types of government loans.
An FHA loan is a mortgage loan insured by the Federal Housing Administration, which allows borrowers to buy a home with a minimum credit score of 580 and as little as 3.5 percent down, or a credit score as low as 500 with at least 10 percent down.
A VA loan is eligible for U.S. military members. These are backed by the U.S. Department of Veterans Affairs and typically have lower interest rates than other types of loans.
A USDA mortgage is one that the U.S. Department of Agriculture guarantees for rural homes. Borrowers can get up to 100 percent financing.
An EEM is a type of mortgage that helps finance energy-efficient upgrades. With this mortgage, the cost of energy-efficient upgrades is added to your primary loan without requiring a larger down payment. To get an EEM, you'll need an energy assessment to determine which upgrades would be most beneficial for your home.
Learn More through Lakeview Mortgage Bankers
For Long Island Mortgage, contact us at Lakeview Mortgage Bankers. We provide clarity, understanding, and ease for your next home loan. Chat with us or apply now through our website!
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