So we just had the Oscars and if Hollywood can put together a list of awards for their industry, then I thought I would run down a list of mortgage products that I feel are best for First Time Home-buyers in 2008.

And the Winners Are?

• FHA Mortgages: 

This is a great product for most clients buying in my market here in Maricopa County Arizona.  With prices coming down, you can buy a lot of a home in the loan limits.  Here are the highlights of this great product.

1. FHA does NOT fall under the declining market value problem such as conforming loans.  What this means is FHA only requires that the home appraises for the sales price.
2. FHA only require 3% down payment.  This is very minimum for most home-buyers.
3. FHA loans allow seller to contribute 3% for closing costs and prepaid expenses.  In this market, you can negotiate all of this into your offer
4. FHA allows down payment assistance (Ameridream).  This allows a non-profit organization to fund the down payment requirement.
5. Non-owner occupied co-borrowers can co-sign for a borrower.  This is great if I have clients who have limited income from their job and Mom and Dad are willing to co-sign.

• VA Mortgage:  

Unfortunately this product can only be used by Active Military, Reservists and  Veterans.  That is the biggest down side of this product.  However if you meet this criteria, then you have a big winner in this loan product.  Here are the highlights

1. VA does NOT fall under the declining market value problem such as conforming loans.  VA does require a special VA appraisal, but if the value comes in for the sales price, then you are fine.
2. VA can go with 100% financing.  This means -0- money down.
3. VA does NOT have mortgage insurance.  Since you pay a VA funding fee financed into the loan, this allows the mortgage to have a cheaper payment
4. VA allows up to 4% in seller concessions for closing costs and/or pre-paid expenses. 

And the Loser Is?

• Conforming Mortgages: 

This product has many dis-advantages for most first-time home-buyers, and should only be considered if the above options will not work out.  Here is a list of some of the negative reasons to stay away from this product if you can. 

1. This product requires at least 5% down.  If your property is in a declining market area, then the product requires at least 5% down.  Most first-time homebuyers it seems impossible to save these funds.  These funds also cannot be in the form of a gift.  The lender will require that the 5% down payment requirement to come from your own funds.
2. The mortgage insurance cost is much higher on this product. 
3. You cannot use non-owner occupied co-borrowers to co-sign. 
4. This product usually will have just a slightly higher interest rate.

There are times when this product is best, and it usually is when I have a client that can put 20% or more down on a home.  That is when this product shines.

Well Folks, I hope this information helps.

We are unique people out there.  We expect better then "would you like fries with that drink".  I just have learned to use my Midwest values and transfer them into my mortgage business.  If you are looking for something a little more unique in your next mortgage loan, please do not hesitate to get a hold of me. 

My name is Gary Miljour and this is what I do best.

Please note, I wanted to add an update and clarify a comment in my post that a trusted fellow blogger pointed out.  In my above post, I stated that conforming requires at least 5% down.  I want to clarify my position.  conforming still allows 100% financing, as long as you are buying in a market that is NOT declining, but in Maricopa County, Arizona, most of the area has been identified as a declining market area.  (Thank you Jason Sardi for bringing this to my attention).