Financing your new home can be such a challenging experience to navigate and comprehend. Having worked with a great number of first time and for that matter second or third time home buyers I thought it might be useful information for buyers to have. I know it’s useful information for me to have.
My take from the information below is first and foremost do your research first. See what kinds of programs lenders have.
Most all lenders have:
Conventional Loans & programs some which now start at a Deposit of 3-5% and can go up to 20% or more. Your debt to income ratio or DTI (how much you have in regular bills compared to how much you make) is low on Conventional 43-45% and your credit score needs to be higher than most other at a minimum of 640-660. Up to 9% Closing Costs. Seller Concessions Allowed.
FHA Loans- one of the most popular loans for first time home buyers allows you to put down a Deposit of 3.5% with DTI of 50-55% and a credit score at or above 620. Buyers pay a 1.25% monthly Mortgage Insurance (MI). And Up to 6% Closing Costs seller concessions allowed.
FHA 203k Streamlined Rehab Loan allows 50-55% DTI with up to $35,000 allowed for Cosmetic or Non-Structural Repairs/Renovations allowed.
VA Loans- allow Veterans to buy homes with 0% Deposit or No Money Down. Veteran’s DTI is stricter at 41-50% as are other No Money Down Loans like Rural Development. Minimum Credit Score is 620-. No MI, mortgage insurance cost. 1.5%-3.3% Funding Fee. No limit to Seller Concessions.
Rural Development aka USDA Rural Development or RD Loans are also 0% Deposit or No Money Down Loans. However when making an offer on both VA and RD loans all sellers expect an Earnest Money Deposit to hold the property off the market until closing. With RD and or VA you can get your Earnest Money Deposit back at closing if that’s what you choose to do. A .30% MI Mortgage Insurance is needed. 2% Funding Fee which can be rolled in to mortgage. Up to 6% Seller Concessions allowed.
Manufactures Home Loans really depend upon where they are located. Whether they are on their own land, in a mobile home park or a Cooperative Park depends upon which lenders will finance. So when doing your research check out the lenders that finance in the area(s) you want to buy.
NH Housing has more great options for first time home buyers, including grants for down payments or closing costs. Find out more at
This information is meant as a general guide for home buyers from a real estate agents view point. Please check with your lender for more information on the programs they offer.
Find more great information below from these lenders: Barbara Cunningham of St. Mary’s Bank, Bob Tilton of Equity America and Kerry MacDonald “Mac” of Residential Mortgage Services (RMS).
Bob Tilton from Equity America provided this helpful information.