First Time Home Buyers
FMFCU has a variety of mortgage options for first-time homebuyers. Finding the perfect home is the hard part; a FMFCU mortgage will be the easy part.
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First-Time Homebuyer Discount
Applying for a first mortgage can seem a little overwhelming. However, FMFCU’s mortgage products will bring you closer to homeownership.
Conventional or FHA Loan
- 0%-3% down payment
- Must be your first home or you have not owned a home in the last three years
Additional Eligibility Requirements
To be eligible for an FMFCU First-Time Homebuyer Discount, you must meet the following five conditions:
- All adults intending to live in the home within 12 months from closing are first-time homebuyers. This is defined as someone who has not owned (had Title to) a principal residence during the previous three years.
- Acceptable credit history and ability to make monthly payments on the home. Generally, plan to use no more than 30 percent of your gross monthly income for your monthly mortgage payment.
- Our loan officers can determine how much home you can afford, as well as any credit issues to work on.
- Sufficient funds to pay standard closing costs, including prepaid tax and insurance items. Commonly include credit reports, appraisals, title fees, etc. Homebuyer education may be required and can be obtained through the credit union’s mortgage insurer unless proof from an accredited agency is provided.
- Sufficient funds for a down payment on prospective home although programs with no down payment required are available. Borrowers who have a down payment of less than 20 percent of the home’s purchase price or appraised value are usually required to obtain mortgage insurance to protect FMFCU in the event that the mortgage becomes delinquent (you fall behind on your payments). The amount of the down payment differs according to the loan type.
Borrowers with an underwriting score of 700 or more may qualify for our 0% down payment.
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95-97% Conventional Mortgage
Qualify for this fixed-rate or adjustable-rate conventional mortgage with as little as a 3-5% down payment.
- Fixed-rates loans of 10-, 15-, 20-, 25-, and 30-years available.
- Adjustable rate (ARM) loans of 1/1, 3/1, 5/1, 5/5, 7/1, and 10/1 available.
- Private Mortgage Insurance (PMI) required.
Remaining funds needed to settle can come from a variety of sources: gift, seller’s assist up to 3% of the purchase price (6% seller’s assist allowable with a 10% down payment), government grant, a withdrawal or loan against retirement funds, etc. Low down payment program requires minimum credit score of at least 660 and we can lend you up to the conforming loan limit, presently at $453,000.
Owner need to occupy the home as primary residence. For all types of detached or attached housing, including condominiums. Eligible loan types: all fixed rate and adjustable rate mortgage products. Fixed rates terms: 30-, 25-, 20-, 15-, and 10-year terms. ARM products: 1/1 ARM, 3/1 ARM, 5/1 ARM, 5/5 ARM, 7/1 ARM and 10/1 ARM, which often offer a significantly lower start rate than our fixed rate options.
Mortgage type requires Private Mortgage Insurance (PMI), insurance that the borrower pays to the lender and its coverage protects the lender in the event of default. Borrowers can also consider: piggyback financing or an 80/15/5 or 80/10/10 to avoid the payment of PMI. PMI is not required when borrower(s) have a 20% down payment or more.
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FMFCU 5/5 Adjustable Rate Mortgage (ARM)
This first-time homebuyer mortgage option is unique to FMFCU. No down payment with no Private Mortgage Insurance (PMI) for homebuyers who meet the required criteria. An ideal choice for members with good credit and low monthly debt who have found it challenging to save enough money for both a down payment and closing costs.
- Rate is fixed for the first five years
- Adjusts every five years thereafter
Minimum borrower contribution is 0% of the purchase price from borrower funds and the remainder of funds to close can come from: gift, seller’s assist up to 4% of the purchase price, government grant, a withdrawal or loan against retirement funds, etc.
Rate is fixed for the first five years and adjusts every five years thereafter. No prepayment penalty, which allows you to refinance at any time into a fixed-rate product (once you have sufficient equity). Option requires less money to close than an FHA mortgage and does not carry upfront Monthly Insurance Premium (MIP) fee (1.75%) or ever-increasing monthly MIP charge.
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FHA Mortgage
FHA loans, insured by the Federal Housing Administration, are an ideal choice for members who have smaller savings, a lower credit score, and prefer a fixed-rate option.
- As little as a 3.5% down payment.
- Eligible with 10-, 15-, 20-, 25-, and 30-year fixed rate loans.
- Mortgage Insurance Premiums (MIP) required.
3.5% down payment can come from: gift, grants, or personal funds. The rest of the funds needed to settle can come from a variety of sources: gift, seller’s assist up to 6% of the purchase price, government grant, a withdrawal or loans against retirement funds, etc. This low down payment program requires a minimum credit score of at least 640 and we can lend you up to the conforming loan limit, presently at $417,000. Homeowner will need to occupy the home as primary residence. Available for all types of detached or attached housing, including condominiums.
Eligible loan types are fixed rate and can have terms of 30-, 25-, 20-, 15-, and 10-years. Requires Mortgage Insurance Premium (MIP), insurance that the borrower pays to the lender and protects the lender in the event of default.
FEATURE CONVENTIONAL LOAN FHA LOAN Minimum Down Payment Requirement 3% - 5% 3.5% Upfront PMI/MIP Cost N/A 1.75% Maximum Sellers Assist 3% of purchase price with 5% down or 6% with at least 10% down payment 6% of purchase price Minimum Score Requirement 660 580 - 620 Beginning equity in property 3% - 5% 1.811% PMI/MIP monthly premium based on a $100,000 purchase price with minimum down payment $93.42 for scores 740+. $115.58 for scores 720-739. $137.75 for scores 700-719 $139.10 Cancellation of PMI/MIP premiums Borrower can request PMI removal after two years or automatic termination once loan reaches 78% of original value MIP is a permanent part of the payment until the loan is either refinanced or the property is sold Alternatives to PMI/MIP FMFCU can offer two mortgages to avoid PMI, known as an 80/15/5 or 80/10/10 ALL FHA loan requests must have MIP regardless of LTV, no exceptions or alternatives
First-Time Homebuyer Mortgage Options
Have more questions? Ready to move forward? FMFCU’s experienced mortgage officers will help you along the way.