Loan Types for First-Time Homebuyers

Which Home Loan Might be Right for you as a First-Time Homebuyer?

Understanding your home loan options and choosing the right mortgage is just as important as choosing the right home. We offer many home loans for first-time homebuyers, here are a few options:

30-Year Fixed-Rate Mortgage

• Steady monthly payments over 30 years.
• More affordable monthly payments due to longer term.

15-Year Fixed-Rate Mortgage

• Shorter payment period for faster mortgage payoff.
• Reduced interest payments over the loan's life.
• Higher monthly payments due to shorter term.

VA Loan

• Guaranteed by the VA for veterans or surviving spouses.
• No down payment is required and no private mortgage insurance (PMI)
• Guarantee Fee may apply.

FHA Loan

• Popular among first-time buyers.
• Lower down payment and credit score requirements.
• Insured by the Federal Housing Administration.

Conventional Loan

• Fewer restrictions than government-guaranteed loans.
• Down payments as low as 3%.
• No mortgage insurance with 20% down payment.
• More economical for buyers with strong credit.

Adjustable Rate Mortgage (ARM)

• Interest rate adjusts to the market after a set period.
• Initial savings with lower rate and monthly payments.
• Riskier in a rising interest rate environment.
• Suitable for disciplined savers with strong financial plans.

Interest-Only Loan

• Interest-only payments for a set term (usually 5-10 years).
• Lower monthly payments, potential tax benefits.
• Risks include substantially higher payments later.

I CAN Mortgage

• Customizable loan terms from 8 to 30 years.
• Potentially pay off loan earlier, save on interest, build equity faster.

USDA Loan

• No down payment is required.
• For eligible rural and suburban areas.

Non-Qualified Mortgage (Non-QM) Loan

• Alternative income verification for self-employed, retired, or those with fluctuating incomes.
• Ideal for non-traditional borrowers.

Buydown Loan

• Pay an upfront fee to temporarily lower your interest rate and monthly payments.
• Ease into your mortgage with more affordable initial payments.
• Allows time to manage other expenses or upgrade your home.

Need more info? Read our first-time homebuyer guide or visit our first-time homebuyer resource center.