Delaware Mortgage Overview
Delaware is the second smallest state in
the United States and is also one of the only states with no sales tax. Its
median house price is around $250,000 and almost 75 percent of the homes in
Delaware are owner-occupied
If you're thinking of moving to Delaware,
there are great first-time homebuyer programs available.
Delaware conventional loans
Borrowers with
great credit and low outstanding debts may qualify for a conventional loan.
These loans aren't backed by the government, so borrowers pay Private Mortgage Insurance
if they make less than a 20 percent down payment, but the low interest rates
and closing costs are worth it. You can cancel PMI once you owe less than 80
percent of the home's value.
Delaware FHA loans
Borrowers with a lower
credit score may do better with FHA financing. FHA loans require just a 580
credit score and a 3.5 percent down payment. Borrowers with a lower credit
score may qualify too if they have at least 10 percent down on the home. FHA
loans have flexible underwriting requirements, but require mortgage insurance
for the life of the loan.
Delaware VA loans
Veterans of the military or
any current military member with at least 181 days served may qualify for 100 percent
VA financing. With no down payment, veterans need just a 620 credit score and
'decent' debt ratios to qualify. VA loans don't require monthly mortgage
insurance either.
Delaware USDA loans
Borrowers looking to live
in rural parts of Delaware and who don't make over 115 percent of the area's
median income may qualify for a USDA loan. This loan program doesn't require a
down payment and has low interest rates and closing costs. USDA loans require
monthly mortgage insurance, but it's not as high as other programs.
First-Time Homebuyer Programs in Delaware
The Delaware State Housing Authority has a
few great programs for first-time homebuyers:
DSHA Homeownership Loans
The DSHA homeownership loans
offer lower interest rates for borrowers with low to moderate-income levels.
Borrowers need a 620 credit score and max debt ratio of 45 percent. All
borrowers must attend homebuyer education courses.
Down payment assistance
Borrowers using the
DSHA homeownership loan may also use the Preferred Plus Assistance program
which provides money for the down payment and/or closing costs. The funds are a
second loan with no interest and due when you refinance the mortgage or sell
the home. Borrowers may get as much as 2 to 5 percent of the sales price for
down payment assistance.
Home for grads
Borrowers who recently
graduated college (within the last 3 years) with a 4-year degree may qualify
for a mortgage rate that's half a percent less than traditional rates.
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