Niche loans

As a homebuyer, your loan officer or even realtor may tell you about some basic programs – conventional, 20 % down or even FHA mortgages.  But make sure you ask about some specific programs.

There are 3% down conventional loans – Fannie Mae has a new Home Ready program and Freddie Mac has  it's Home Possible program. Both allow you to put 3% down and get gift money for your down payment.  With both these programs you can eventually get rid of mortgage insurance.  You may also get reduced mortgage insurance.  The Home Ready program may allow you to use income from roommates, which may help you qualify for more home.

FHA is a popular first time homebuyer program.  But there is also the FHA condo approval- if you are looking at condos and the condo is FHA approved, it may be an easy way to buy.  Talk to your loan officer and ask if the condo you are interested in is FHA approved.

Piggyback loans are second mortgages used to avoid mortgage insurance.  You usually need higher credit scores, but can do 10% down of your own money and get a 10% down 2nd mortgage.  That way your first mortgage is at 80%, but you only need 10% of your own money. Sometimes the overall costs are lower with a piggyback mortgage.

If you are a service worker – police, fireman, teachers, government workers; there may be programs that help you avoid some closing costs.  Talk to your lender and see if there is anything special for you – sometimes it depends on the area you are buying in.

Sometimes it takes a bit of research to find the right loan for you.  Don't be afraid to ask questions and see if there is a different option available to help you purchase your new home!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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