What Mortgage Loans are Available?

Nearly 66% of home buyers finance the purchase of their home.  The balance is paid in cash. 

There are several types of financing to consider.  Some mortgage loans are part of a government program, while other loans are investor backed mortgage products.  Each loan is designed for different personal circumstances.  Buying a home is made quite affordably with the use of a mortgage to finance the purchase. 

Conventional Mortgage:  The term “conventional” simply means the mortgage is not part of a government backed program.  Typically, the minimum down payment is 5% of the purchase price or a home buyer can place a higher down payment, if desired.  There are models within conventional mortgages which offer only a 3% down payment.  There can be a “seller concession” of approximately 6%. 

FHA Mortgage:  This is a government backed mortgage financing option that may appeal to first time homebuyers.  This mortgage option has a more liberal approach to qualifying home buyers and how they view an applicant’s income and monthly financial responsibilities.  The minimum down payment is 3% or less.  There can be a “seller concession” of approximately 6%. 

VA Mortgage:  This mortgage financing option may be used by veterans, service members or surviving spouses.  This option affords the applicant to finance 100% of the purchase price of a home. 

USDA Mortgage:  Formerly known as the “Farmers Home Loan”, this mortgage option has geographic requirements as well as income limitations associated with it.  Generally, more rural properties would qualify for this mortgage type.  However, there are many areas of the Capital Region of New York State that might surprise you to learn would qualify for this option.  This mortgage option does not require a down payment. 

Regardless of the mortgage program, the mortgage lender will analyze an applicant’s income, revolving monthly obligations (credit card debt, car payment, alimony, etc.) and provide you with a price range that is comfortable for a home buyer to consider. 

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