Maryland Mortgage Overview
The average Maryland home price is $314,000
and just about 66 percent of homes are owner-occupied. It's nice and close to
our nation's capital, yet a lot less expensive to live there, which is great
for those who work in or near the capital. You can get affordable closing and
still work where you want.
If you're looking for a Maryland home, here
are your mortgage options.
Maryland FHA loans
FHA loans are a low down
payment option with flexible guidelines. You need only 3.5 percent down and may
use gift funds for some or all of it. You'll need a 580 credit score to get these
terms, but if you have a 500 - 579 score, you may still qualify with a 10 percent
down payment. FHA loans have mortgage insurance for the life of the loan.
Maryland VA loans
If you served our country,
the VA offers a 100 percent financing program if you have at least a 620 credit
score. With no down payment and flexible guidelines, it's easy for veterans to
stop renting and become homeowners. As long as you meet the disposable income
requirements for your area, you are on your way to owning a home.
Maryland USDA loans
If you don't qualify for
the above programs, the USDA loan may offer an option. Your household income
must be less than 115 percent of the area's income and you need a 640 credit
score. Maryland USDA loans are available in low populated areas that the USDA
deems rural, but are just outside city lines.
Maryland conventional loans
If you have great
credit (660+) and a good debt ratio (lower than 40 percent), you may qualify
for a conventional loan. You need 3 percent down as a first-time homebuyer or 5
percent as a subsequent buyer. Conventional loans require PMI until you owe
less than 80 percent of the home's value.
First-Time Homebuyer Programs in Maryland
The Maryland Department of Housing has two
major programs — the Advantage and Flex program:
1st Time Advantage Direct or Flex
First-time homebuyers buying in a targeted area may secure the 1st
Time Advantage or Flex Direct loan with low interest rates and flexible terms.
It doesn't include down payment assistance, but you can use DPA from other
sources with it.
1st Time Advantage 5000 or Flex 5000
The 1st Time Advantage or Flex 5000 is the same as Advantage
Direct, but it includes up to $5,000 in closing costs and down payment
assistance. The assistance is a second mortgage, but you don't owe anything
until you sell the home or refinance the first mortgage.
1st Time Advantage 3% Loan
Time Advantage 3% or Flex Loan is the same as the Advantage Direct, but it
comes with 3% of the first mortgage in closing cost and/or down payment assistance.
The aid is a second mortgage that's not due or payable until you refinance or
sell the home.
Flex 3% or 4% Grant
The Maryland Department of
Housing also offers a Flex 3% or 4% down payment and closing cost assistance
grant that isn't repayable. However, you must be a low-income borrower to
Maryland SmartBuy Program
Department of Housing helps borrowers with existing student debt to qualify for
a mortgage by providing 15% or less of the
home's price to pay off student loans. The balance must pay off at least
one borrower's student loans completely to qualify.