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First-Time Home Buyers: Understanding Your Mortgage Options

June 2, 2023
Deatro Carey
Deatro Carey

Understanding the various mortgage loan options is one of the most critical parts of purchasing a home. In this article, we'll walk you through the various mortgage loan alternatives that might be available to first-time homebuyers and existing homeowners.


Understanding Your Mortgage Options


Here is a list of mortgage terms and loan options to help you make an informed decision.

  1. Minimum Down Payment: Some mortgage programs may allow you to put as little as 3% down on the purchase price of the home you want to buy as your primary residence.

  2. Payment Terms: The amount of time you may be allowed to repay the mortgage loan on a monthly basis is referred to as the payment terms. Most home loans have repayment terms of up to 30 years.

  3. Fixed-Rate Loan: A fixed-rate mortgage has an interest rate that remains constant throughout the loan repayment period. Fixed-rate mortgages provide stability and predictability, making them an ideal choice for first-time homebuyers and existing homeowners who wish to budget and prepare for their monthly mortgage payment.

  4. Adjustable-Rate Mortgage (ARM) Loan: An ARM is a form of mortgage with a variable interest rate; this means it may adjust over time. Homebuyers who plan to sell or refinance within a few years may choose to select this interest rate alternative.

  5. Conventional Loan: Provides a range of purchase, interest rate, and loan repayment terms, as well as loan limits. First-time and existing homeowners are eligible.

  6. FHA Loan: A mortgage loan backed by the Federal Housing Administration (FHA) designed to help purchasers who may need a low down payment option for the purchase of a primary residence and/or homeowners who may need financial flexibility to refinance their primary residence.

  7. VA Loan: A mortgage loan backed by the United States Department of Veteran Affairs (VA) that is only available to veterans and active-duty military personnel. This financing allows military personnel and their families to buy a primary residence with no money down and no mortgage insurance. Additionally, those who currently have an existing VA loan on their primary residence may apply for a refinance loan.

  8. Rural Development Loan: A mortgage loan guaranteed by the United States Department of Agriculture (USDA) Office of Rural Development, that aims to increase homeownership in rural areas. The loan may offer flexible terms, such as a 0% down payment, making it an affordable alternative for first-time homebuyers who wish to buy a property in a rural location.

Understanding your mortgage alternatives is an important first step toward achieving and maintaining homeownership. First-time and repeat home buyers, as well as existing homeowners, can decide the best mortgage option for their financial needs and long-term housing goals by exploring the many types of mortgages available.

Speak with a Hancock Whitney home lending expert to learn more about which mortgage is right for you and your financial situation.



NerdWallet.com, 6 First-Time Home Buyer Loans and Programs, https://www.nerdwallet.com/article/mortgages/programs-help-first-time-homebuyers

Homebuyer.com, 7 Best Home Loans for First-Time Buyers, https://homebuyer.com/learn/home-loans-for-first-time-buyers

Bankrate.com, Guide to First-Time Homebuyer Loans and Programs, https://www.bankrate.com/mortgages/first-time-homebuyer-loans-and-programs/

Realtor.com, First-Time Home Buyer's Glossary, https://www.realtor.com/advice/buy/first-time-home-buyers-glossary/


The information, views, opinions, and positions expressed by the author(s), presenter(s), and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.

This information is general in nature and is provided for educational purposes only. Information provided and statements made should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Hancock Whitney Bank encourages you to consult a professional for advice applicable to your specific situation.