Your Options

Conventional Home Loan

If you have managed your credit wisely, then you may qualify for a conventional mortgage with a lower interest rate. You can pay as little as 3% for your down payment, and once you've paid 20% of your loan (AKA 80% Loan-To-Value), your mortgage insurance (which increases your monthly payment) goes away. It’s time to reap the rewards of your financial foresight!  

Available Options:
ARM: 5, 7 and 10-year   
Fixed-Rate: 10- to 30-year

FHA Loan

The Federal Housing Administration (FHA) offers loans with as little as a 3.5% down payment, which are pretty popular among many first-time homebuyers. They aren't as strict on requirements like credit, which makes it easier to qualify. They do require mortgage insurance which will increase the monthly payment. Another great plus: If a family member wants to offer you money for your downpayment as a gift, this loans allows for it.  

Available Options:
ARM: 5 year                 
Fixed-Rate: 15, 25, 30-year

VA Loan

The Veterans Administration (VA) offers qualified veterans, active duty military and your family members many benefits to get into your first home. First-time homebuyers may not need a down payment, allowing you to get into a home without years of saving. You're also exempt from mortgage insurance, lowering your monthly payment. And lastly, Basic Allowance for Housing (BAH) can be counted toward income qualifications, increasing the amount of income you claim. 

Available Options:
ARM: 5-year                 
Fixed-Rate: 15, 25, 30-year

USDA Loan

A United States Department of Agriculture (USDA) rural loan won’t limit your home choices to a farm. In some cases, properties zoned “rural” are just a few miles away from the nearest city. USDA loans don't require a down payment and offers easier credit qualification, which makes them very attractive to first-time homebuyers. You can save your cash to furnish your first home, save for life's expenses, etc. 

Available Options:
Fixed-Rate: 30-year
Income and property restrictions apply.

Buy a Fixer Upper

Some people can’t resist the allure of a fixer-upper, even if it's your first home. They're often charming, and you can make them your own without having to build from the ground up. A Federal Housing Administration Rehabilitation loan (FHA 203k) makes it easy for borrowers to afford a new home—and its renovations.

Available Option:
Fixed-Rate: 30-year

Adjustable Rate Mortgages (ARMs)

Industry statistics state that 90% of homeowners don’t stay in the same mortgage for nine years. ARMs are, therefore, an attractive option for many first-time homebuyers, who can buy a smaller starter home at a lower rate with the hope of moving into a family-sized home in about five years, before the mortgage adjusts to a different interest rate.
 
Homebuyers have the option of ARM’s that combine principal and interest payments or non-conforming interest-only ARM’s. Depending on the ARM product you select, your rate will be fixed for a period of up to 10 years. For example, In a 5/1 Hybrid ARM for example, the interest rate is fixed for the first 5 years, and the rate then adjusts annually (the 1 in 5/1) until the loan is paid off or refinanced.

Available Options:
3/1 ARM, 5/1 ARM, 7/1 ARM and 10/1 ARM
 

Jumbo Mortgage

If you're buying in a high-cost cities such as San Francisco, Los Angeles or Chicago, or maybe you're building a custom home, you may need a jumbo loan. These mortgages are available to qualifying borrowers who want to finance properties that exceed the standard conventional loan limits. Jumbos come with flexible rates and terms. 

Available Options:
Fixed-Rate: 15, 30-year
ARM: 5, 7, 10-year                 

Financial Assistance Programs

States across the country all have different grant programs to help homebuyers get into new homes. Some states also have great incentives to help first-time homebuyers with their down payments. Often, states set aside grant money to help new homeowners with the upfront costs of buying a home. 

Check with a mortgage loan originator to see if your state offers down payment assistance.
*Income and property restrictions apply.