Buyer be Ready…What’s the best loan for a first time buyer?

In continuing the “Buyer be ready” series here on the Sold in the City DC blog. Our first guest post is from Bill Van Dyke, President at Paradigm Mortgage Services in Bethesda, Maryland.

A question many first time buyers may have is “What is the right loan for me as a first time buyer”? Here, Bill lays out a simple explanation and is available anytime to answer any more questions you may have:

The best loan for a first-time home buyer varies depending on the circumstances of the buyer. How much money does the buyer have for a down payment? What are their credit scores?

An FHA loan requires the least money to buy a property, allows lower credit scores, but has a higher payment due to the mortgage insurance premium (MIP). If the buyer can afford a 5% down payment and has a high credit score, they can get a loan with private mortgage insurance (PMI), which costs less than FHA mortgage insurance.

How long do they plan to own the property? If the plan is to own the property long term, then a 30 year fixed rate mortgage is appropriate. If the plan is to move up or move on, an Adjustable Rate Mortgage (ARM) may be more appropriate. Rates and monthly payments are lower with ARMs.

…If you have any further questions, you can reach Bill anytime:

Paradigm Mortgage Services, Inc.
7272 Wisconsin Avenue, Suite 300
Bethesda, MD 20814
301-941-1992
bill@gotoparadigm.com
www.gotoparadigm.com