There are a couple of different types of loans that are popular for first-time homebuyers. A conventional loan requires a minimum 3% down payment, and has monthly mortgage insurance. The mortgage insurance can be removed from the payment when you have 20% equity in the home. A FHA loan requires a minimum 3.5% down payment, and has 2 types of mortgage insurance: up-front mortgage insurance which is a lump sum that is added to the loan amount, and a monthly amount that is included in your monthly mortgage payment. Typically, if you have a great credit score, the conventional loan results in a lower payment, and if you have a lower credit score, the FHA loan results in the lower payment. If you have any questions as to what loan would get you the lower payment, contact us and we can help!
** If you would like to see the other videos in the first-time homebuyer series, click link below.
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