Rhode Island Mortgage Overview
Rhode Island is a small state with just
about 1 million people living there, but it's quaint and affordable. The median
home price is $262,000 and about 60 percent of homes there are owner occupied.
If you're thinking of living in Rhode
Island, here are your loan options to buy a home.
Rhode Island conventional loans
borrowers can get a conventional loan. This means a 660 credit score or higher.
First-time homebuyers need just 3 percent down. If you owned a home before, you
need 5 percent down. All borrowers need a debt ratio around 36 percent, but
some lenders allow higher ratios. You'll pay mortgage insurance until you owe
less than 80 percent of the home's value.
Rhode Island FHA loans
FHA loans are a good
alternative to conventional loans. You need just a 580 credit score and 3.5
percent down. If you have a 500 - 579 credit score you can get approved with a
10 percent down payment. Down payment assistance funds and gift funds are
allowed, but you may need to contribute some of your own money too. FHA loans
have mortgage insurance for the life of the loan.
Rhode Island VA loans
Veterans can get 100
percent financing from VA lenders. All you need is a 620 credit score and proof
of income. Lenders like a 2-year stable income history and proof you can afford
the mortgage and your current bills. VA loans don't have mortgage insurance,
but they do have an upfront funding fee.
Rhode Island USDA loans
If you want to live in
a less populated area and make less than 115 percent of the area's median
income, consider a USDA loan. You need a 640 credit score but don't need a down
payment. USDA loan rates are low and the mortgage insurance you pay for the
entire year is low too.
Programs in Rhode Island
If you have a minimum credit
score of 620 you may receive up to 6 percent of the sales price or
$15,000, whichever is less. There aren't any fees, but it is a second mortgage
with an interest rate equal to the rate of your first mortgage.
First Homes Tax Credit
can get a tax credit of 20 percent of the mortgage interest paid for the year
up to $2,000. You must meet the income requirements and can claim the credit
for the life of the loan.