Mortgage 101: What Every First-Time Homebuyer Needs to Know

Welcome, future homeowners! At BankSouth Mortgage, we understand that buying your first home is a major milestone, and navigating the world of mortgage options for first-time homebuyers can feel overwhelming. That’s why we’re here to break down the basics for you. Let’s explore the general types of mortgage options available, so you can make informed decisions and move confidently towards your dream home.

Conventional Loans

What They Are: These are traditional loans that aren’t backed by the government. They can come with fixed or adjustable rates.

Why It’s Great for FTHBs: If you have a strong credit score and can make a higher down payment, conventional loans can offer competitive rates and fewer fees.

Fixed-Rate Mortgages

What They Are: Fixed-rate mortgages are one of the most straightforward and popular options. With this type, your interest rate stays the same throughout the life of the loan.

Why It’s Great for FTHBs: The consistency of fixed monthly payments makes budgeting easier, giving you peace of mind knowing that your rate won’t change.

Adjustable-Rate Mortgages (ARMs)

What They Are: Unlike fixed-rate mortgages, ARMs have interest rates that can change periodically based on the performance of a specific index.

Why It’s Great for FTHBs: ARMs typically offer lower initial interest rates, which can mean lower initial monthly payments. This can be beneficial if you plan to move or refinance before the adjustable period begins.

FHA Loans

What They Are: FHA loans are backed by the Federal Housing Administration and are designed to help lower-income and first-time buyers qualify for a mortgage.

Why It’s Great for FTHBs: They require lower down payments and have more flexible credit score requirements, making homeownership more accessible.

VA Loans

What They Are: VA loans are available to veterans, active service members, and their families, and are backed by the Department of Veterans Affairs.

Why It’s Great for FTHBs: VA loans often require no down payment and offer competitive interest rates without the need for private mortgage insurance (PMI).

USDA Loans

What They Are: USDA loans are backed by the United States Department of Agriculture and are designed for homebuyers in rural and suburban areas.

Why It’s Great for FTHBs: These loans offer zero down payment options and favorable interest rates for eligible rural homebuyers.

Special Programs & ReadyAssist Down Payment Assistance

BankSouth Mortgage offers several special programs and down payment assistance options to help make your home purchase more affordable:

Conventional 97% Mortgage

• What It Is: A conventional fixed-rate mortgage requiring only a 3% down payment.
• Why It’s Great: Ideal for buyers with limited upfront funds who want the stability of a conventional loan.

Rate Locks & Float Downs

• What It Is: Secure your interest rate with a rate lock and enjoy the flexibility of a float-down option if market rates improve.
• Why It’s Great: Lock in your rate confidently, knowing you can benefit from a lower rate if the market becomes more favorable before closing—with no additional cost.

 FHLB First-Time Homebuyer Program

• What It Is: Up to $12,500 in down payment or closing cost assistance.
• Why It’s Great: Eases the financial burden for first-time buyers.

Community Partner Program

• What It Is: Up to $15,000 in assistance for law enforcement, educators, and healthcare workers.
• Why It’s Great: Supports community partners in achieving homeownership.

 Georgia Dream Homeownership Program

• What It Is: Up to $7,500 in assistance for public servants and educators.
• Why It’s Great: Tailored support for first-time buyers or those who haven’t owned a home recently.

South Carolina Housing Homebuyer Program

• What It Is: $8,000 in forgivable down payment assistance with 0% interest.
• Why It’s Great: Reduces upfront costs with favorable terms for eligible buyers.

Choosing the Right Mortgage for You

Understanding these basic mortgage types is the first step in your homebuying journey. Each option has its benefits, and the right choice depends on your financial situation and homeownership goals.

ReadyLoan®: Your Digital Mortgage Platform

At BankSouth Mortgage, we’re committed to making your homebuying experience as smooth as possible. Our ReadyLoan® Digital Mortgage Platform streamlines the process from start to finish:

• Easy Application: Apply online anytime, anywhere.
• Real-Time Updates: Track your loan progress and securely upload documents.
• Convenience: Sign documents electronically and stay informed every step of the way.

With ReadyLoan®, you can navigate the mortgage process with ease and confidence.

Why Choose BankSouth Mortgage?

At BankSouth Mortgage, we’re dedicated to making your homebuying process simple, speedy, streamlined, and stress-free. Our expert lenders are here to provide personalized guidance and innovative tools to help you every step of the way. We prioritize your needs and strive to deliver an unmatched mortgage experience.

Ready to Take the Next Step?

Download our ReadyLoan® app today to start your application process and track your loan progress seamlessly. With BankSouth Mortgage by your side, you’ll have all the support you need to turn your homeownership dreams into reality.

We hope this guide has helped demystify some of the common mortgage options available to first-time homebuyers. If you have any questions or need further assistance, feel free to contact us. We’re here to help you every step of the way!