General Mortgage Loan Info
Looking for a home in New York? With the increasing construction costs and competitive bidding, there is a low housing inventory. While it can be a challenging market, there are still plenty of opportunities for homebuyers to get financing and move forward with a purchase. The State of New York Mortgage Agency (SONYMA) offers low-interest mortgage loans and programs to help qualified first-time homebuyers. They provide practical information regarding the homebuying process, as well as assistance in securing funds for a down payment. SONYMA can also help you determine if you are eligible for features that can make your home more affordable.
VA Loans in New York
A VA loan is made by private lenders, but guaranteed by the Department of Veterans Affairs, so your lender needs to be licensed in New York. The VA loan program also offers a $0 money-down benefit, which can help veterans who might not have the ability to bring a large down payment to the closing table. As of January 1, 2020, VA borrowers with their full VA loan entitlement are not restricted by VA loan limits. Thus, you can borrow as much as the lender is willing to lend you without having a down payment. If you do not have your full VA loan entitlement, then you will be bound by Colorado’s VA loan limits, which can vary by county. Some VA buyers in Colorado may also be eligible for a property tax exemption if you meet one of the following conditions:
- A disabled veteran could receive an exemption based on the type of service or disability as determined by the New York State Division of Veterans Affairs. The value of the exemption is determined by the county or municipality.
These loans have no mortgage insurance premiums, low closing costs, no prepayment penalty, and lower average interest rates. You can also reuse the program for veterans with entitlement remaining. While the VA does not set a minimum credit score, individual lenders can set their own credit score requirements.
FHA Loans in New York
New York FHA loans are available for those with less than perfect credit and a lower down payment. The FHA loans are insured through the federal government, which lowers the risk for lenders and allows homebuyers to take advantage of low interest rates. Loan limits are determined by county and home size.
With the lower down payment, however, you will have to pay MIP (mortgage insurance premiums) as part of your monthly mortgage payment. Your closing costs will also include an upfront premium (UFMIP), which can be paid at closing or rolled into the life of your loan.
USDA Loans in New York
The USDA offers a program that allows you to purchase a home without any down payment. You can also finance your closing costs. The mortgage insurance, referred to as the “guarantee fee,” is typically lower than MIP insurance through the FHA. All USDA loans come with a fixed interest rate that will not adjust or fluctuate throughout the life of your loan. Another benefit is that you do not have to be a first-time home buyer.
However, to qualify, you must have a credit score of 640 or greater, meet the income limits, and the property must be in a rural area. You also have to use the property as your primary residence. There are no exact loan limits through the USDA program, since the amount you can borrow will be based primarily on your debt-to-income ratio.
The USDA also offers a Direct Loan Program that assists low and very-low income homebuyers by providing payment assistance to increase their repayment ability. This payment assistance only reduces the mortgage payment for a specific period of time and the amount of assistance is determined by the adjusted family income.