Learn More About Mortgages
Did you know that there are hundreds of different mortgages available to buyers in the Catskills? All of these options might seem overwhelming, but it's actually easy to narrow down the best home loan for your specific needs. Let's take a look at some of the most popular mortgages in our area:
Common Mortgage Options in the Catskills
Conventional loan
- Usually lasts from 15 to 30 years
- Can have a fixed or adjustable rate
- Requires a good credit score and financial history
- Most buyers need a 20% down payment to qualify
VA loan
- Available for active, retired, or veteran members of the armed forces
- Low down payment requirements with no mortgage insurance
- Only available for move-in ready, primary residences
- One-time funding fee may be necessary
FHA loan
- Less-strict income and credit requirements
- Wide range of lower down payment options
- Requires mortgage insurance
- Can have higher interest rates
USDA loan
- Used in rural areas
- Low down payment requirements
- Targeted towards buyers with a modest, steady income
- Check eligibility map before applying
Balloon mortgage
- Payments are based on a 30-year loan but are paid over 5 – 7 years
- At the end of the term, borrower must pay off the balance or refinance
- Often has lower interest rates and credit requirements
- More common with commercial real estate
Achieving the Dream
- Offered by SONYMA
- Down payment as low as 3% with assistance available
- Competitive interest rates
- Can be combined with other state programs
Lender-specialty loans
- Typically offered by lenders
- Can have lower interest rates or down payment requirements
- May be tailored to first-time or low income buyers
- Contact your lender for more information
FHA Plus
- Offered by SONYMA
- Combines an FHA loan with SONYMA down payment assistance
- Available for first-time or repeat buyers
- Can also be used to fund closing costs or refinance a mortgage
Choosing the Right Loan
Consider Rates
Today's mortgage rates have reached record lows, which makes it more important than ever to shop around for the best deal. The lower your interest rate is, the less you'll have to pay over the lifespan of your loan. Most lenders will have their rates easily accessible on their websites, so be sure to do a little research.
Calculate Your Down Payment
Most buyers should have at least 20% of a home's purchase price saved up for a down payment. For example, if a home is listed for $400,000, your down payment should be around $80,000 or more. Some mortgages, however, require less or even no money up front, so you'll want to discuss your options with your lender and agent.
Check for Incentives
Many lenders have incentives for certain buyers, such as first-timers, members of the military, or buyers with a lower income. It's worth exploring your options to see which programs you may qualify for—your lender may even have some recommendations!
Types of Lenders
Banks & mortgage bankers
- The most common lenders
- Earn money from investors and consumers
- Offer other financial services
- Can give special deals to existing customers
Credit unions
- A type of bank owned by account holders
- Acquire funds from their members
- Offer other financial services to members
- May require membership
Mortgage lenders
- An institution that solely makes loans against real estate
- Often sell their loans to banks or servicing companies
- Processing, underwriting, and closing completed in-house
- The mortgage process tends to take less time
Mortgage brokers
- A middleman between the buyer and lender
- Shops around for the best possible deals
- Can be helpful for niche buyers
- Charges additional fees for their services
Federal government
- The US government offers a variety of loans
- USDA loans
- FHA loans
- Other options available from HUD
State government
- Loans backed by the state of New York
- Can be helpful for first-time or low income buyers
- Loans with lower interest rates
- Down payment assistance programs
Choosing the Right Lender
Shop around
Perhaps the most important thing you can do as you search for a loan is to do plenty of research. Because there are so many different types of mortgages available, it can take some shopping around to find the right fit. As you compare options, take note of interest rates, terms and conditions, or special offers from a particular lender.
Get recommendations
Your agent, mortgage broker, or even your loved ones can offer recommendations for a great lender. In fact, your agent may have a list of preferred lenders that they like to work with. Mortgage comparison sites—like NerdWallet or BankRate—can also provide up-to-date information on today's rates and lenders.
Contact lenders
If you have questions for a particular lender, try giving them a call or shooting them an email. They'll be more than happy to discuss their programs with you directly even if you haven't submitted a formal loan application.
Ready to Calculate Your Monthly Payments?
Use our mortgage calculator to estimate your monthly mortgage payments at various home price points, interest rates, down payments, insurance and tax costs, and more. We'd be happy to help you find a loan that fits into your budget!
Have questions? Get in touch with the Catskill Dream Team today to learn more about financing and finding the mountain home you've always wanted.