Lowest Mortgage Rates--and Much More--for First-time Buyers

Posted by  on Oct 08, 2010

Best Mortgage Bargains--Nationwide?

Last week, the New York Times ran a story about some of the amazing mortgage loan deals that are available to first-time buyers living in the Empire State. But it's not just resident there who can access some of the best mortgage bargains ever. Many other states are--or soon will be--offering similarly attractive deals.

You can check out what's available in your state through the Local Home Buying Programs' page on the U.S. Department of Housing and Urban Development's website.

Lowest Mortgage Rates

If the deals outlined in the Times are anything to go by, first-time buyers may be able to take advantage of some of the lowest mortgage rates around. For example, those eligible for the State of New York Mortgage Agency (SONYMA) scheme could find themselves with a 30-year affordable housing loan at 4.75%, which is lower than the rate generally offered to customers with good credit scores by traditional lenders.

Meanwhile, New Jersey plans to introduce a rate of roughly 5% next month, and Connecticut is already offering mortgage loans at a remarkable 4.375%.

New York Program's Features

Program details vary from state to state, but to give you some idea of just how generous the deals can be, here's how SONYMA's website describes its offer:

  • Competitive fixed interest rate loans
  • No points
  • Financing of up to 97% of the value of the property for qualified borrowers and homes (for three and four family dwellings the maximum financing is 90%, and for cooperative apartments the maximum financing is 95%)
  • A low minimum borrower cash contribution requirement of 1% of the value of the property (3% for properties with maximum financing of 90%)
  • 100 day interest rate locks for existing housing and completed new construction (short term lock in)
  • Terms 30 or 40 years (interest rates for 40 year mortgages are 0.25% higher)
  • No prepayments penalties
  • Down Payment Assistance of $3,000 or 3% of the home purchase price (not to exceed $10,000) OR the Tax Credit Advance Loan up to 10% of the home purchase price (not to exceed $8,000)
  • Payment Protection in the event of temporary job loss or accident


Continuing to use SONYMA as an example, the following are the eligibility criteria for New Yorkers (again, check your state's criteria online). You must:

  • Be a first-time buyer or someone who hasn't owned a home for three years or longer
  • Have a steady job
  • Have a good credit history--although there's no set minimum credit score
  • Have monthly debt repayments that total (including the new mortgage loan) no more than 45% of your income
  • Have enough cash to cover down-payment and closing costs
  • Have a low or moderate income for the area in which you live

Best Mortgage Rates for Everyone Else

Don't despair if your state is less generous than New York, or if you're ineligible for these home buying programs. You can still find some of the best mortgage rates around right here.


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