Mortgage Loan Programs & Other Helpful Homebuying Tools
Conventional Loans
A conventional loan is any loan that’s not secured or offered by a government entity but is instead offered by a private lender. If you have great credit and aren’t put off by the potential of a slightly higher interest rate, or your income and circumstances disqualify you from a federal program, a conventional mortgage can be an easy option.
FHA Loans
The Federal Housing Administration insures loans through qualified lenders that are geared toward borrowers who have lower or moderate incomes. They are often available with lower minimum down payments (as low as 3.5%), and borrowers don’t need to have stellar credit scores to qualify. You’ll love this type of mortgage loan program if you’re working on building up your credit. Plus, they also offer loans to make your home more energy efficient, a big cost saver during cold Montana winters.
Loans for Veterans
For current military members, veterans and surviving spouses, VA home loans make a great option. Private lenders issue these loans, and the VA guarantees them. That means that the bank or credit union issuing the loan can often offer more favorable terms. The VA does not require a down payment at all for this type of loan (though some private borrowers may require one). And they come with limited closing costs and no need for private mortgage insurance (PMI). This VA benefit is a great choice if you’re looking to settle down after your service.
Loans for Rural Homebuyers
The US Department of Agriculture guarantees loans for qualifying rural homebuyers. With only seven people per square mile in the state of Montana (making us the third lowest density per square mile in the nation after Alaska and Wyoming), it’s a pretty easy bet that many residents qualify as rural homebuyers. This can help moderate- and low-income purchasers who need a helping hand to make a home in the countryside. This loan can help you out if you’re purchasing a single-family home in a rural area and it will be your primary residence.
Lower Starting Interest Rates with an ARM
An Adjustable Rate Mortgage (ARM) gives you a hand up on home buying. That adjustable rate means you can save early in the term of your loan with a lower monthly payment, letting you put the difference in a high-yield account to help you out down the road. The one thing to keep in mind is that a variable rate can increase as it “varies” later on. This is a great option if you’re only planning on staying in the house for a few years, since you can use that lower starting rate to your benefit.
Home$tart Assistance Programs
Home$tart is a set-aside program to help homebuyers with below-median income purchase a home. It helps out with the down payment, aiming to close the “affordability gap” between what you can afford and the higher cost of homes in your area. Under this program, your lender would approve you for a loan for most of the purchase price, and then a nonprofit provides the difference: up to $45,000, depending on your need.
Buying a home doesn’t have to be mystifying. Our mortgage specialists at RMCU can answer any questions you may have as you begin the house hunt. Reach out to find out what options are available for you,* and start the journey to home ownership.
*Must qualify for membership. Some restrictions may apply. Each account is privately insured up to $250,000 by American Share Insurance. By member’s choice, this institution is not federally insured.
