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Important Note:

June through November our agency may become prohibited from binding coverage should a “Tropical Disturbance” enter the Gulf of Mexico or Caribbean Sea.

In these cases we may be unable to bind new coverage quoted in open proposals until the storm leaves our area and our binding authority has been restored.

Please arrange your coverage protection early to avoid this type of delay. While we regret any inconvenience, the carriers impose these restrictions on all agencies.

Most Common Loan Options for First Time Homebuyers

Most Common Loan Options for First Time Homebuyers

According to the National Association of Home Builders, first time homebuyers account for 27 percent of existing home sales and 16 percent of new home sales. While their market share has declined over the past few years, first timers are still contributing to the housing recovery. As the economy continues to improve, jobs become more plentiful, and wages go up, experts predict they’ll do so in even greater numbers. You—or if you’re already a homeowner, someone you know—can be among them. And, if so, you’ll likely purchase the home with one of the following loans.

A Fixed-Rate Mortgage

The simplest financing option, a fixed-rate mortgage involves a specific interest rate and monthly payment that will remain the same over the life of the loan or loan term. Fixed-rate mortgages are generally available in 15-, 20- and 30-year terms. The longer the term, the smaller the monthly payment will be. The shorter the term, the lower your interest rate (usually) will be. Fixed-rate mortgages are quite affordable in low interest rate environments such as the one we enjoy today.

An Adjustable-Rate Mortgage

More complex and less predictable than its fixed-rate counterpart, an adjustable-rate mortgage involves an interest rate and monthly payment that changes (usually many times) over the loan term. You’ll typically see adjustable-rate mortgages that begin to change—or adjust—two, three, five or seven years after closing. For example, a 5/1 ARM has a fixed interest rate for five years and then adjusts once every year after for the remaining term of the mortgage. Adjustable-rate loans generally carry lower interest rates than fixed-rate mortgages. In a high interest rate environment, they can be an attractive option.

An FHA or VA Mortgage

Fixed-rate and adjustable-rate mortgages are “conventional” if they require a down payment of 20 percent and you meet certain financial criteria (specific debt-to-income ratio, credit score, etc.) to qualify. For first time (or even repeat) homebuyers who do not have the cash to make such a sizable down payment, an FHA (Federal Housing Administration) or VA (Department of Veterans Affairs) loan may be an option. These loans require much smaller down payments and—in many cases—the financial criteria needed to qualify may be more lenient as well.

Whether you want to buy your first home with a conventional fixed-rate or adjustable-rate mortgage, or take advantage of the FHA or VA loan program, contact your real estate or mortgage professional today to learn more about your options and the financing process.