6 Things You Should Know About 100% Home Loans from the Navy Federal Credit Union

When you are trying to buy your first home, you are going through a lot of stress in many cases. People who do not have equity from a previous home often find that it is hard to get into that first house. They may have trouble coming up with the down payment and dealing with the entire mortgage qualification process.

However, there are lenders out there that can make the first-time home buyer process easier. Navy Federal Credit Union offers many special loan products that can help the first time home buyer to make their dream a reality.

If you belong to Navy Federal Credit Union, you may be able to enjoy a mortgage as a first-time home buyer with many benefits. Below are some of the key items to know about:

#1 100% Home Loan Finance Programs

After the last financial downturn, most of the 100% financing loan products that were on the market disappeared. These days, it is difficult to find 100% financing loans. Commonly available loans from FHA require a 3.5% down payment, while loans from Fannie Mae and Freddie Mac require 3% down at least. This can put home ownership out of reach for many Americans, especially in areas with higher home prices.

Navy Federal Credit Union does offer some 100% financing home loans, if you qualify. You will need to show an adequate credit score and income, but if you can qualify, this will make it much easier to buy your first home.

You still may need to pay at least some of the closing costs, but not having to make a down payment is a huge relief to the first-time home buyer.

#2 No PMI on this NFCU Loans

Most people who put down less than 20% on a home are required to pay private mortgage insurance up front and each month they make their payment. This insurance is to pay back the lender if the borrower does not pay the mortgage. People who put down less than 20% are more likely to default on their mortgage.

PMI is a substantial, additional monthly cost and it is a great thing with Navy Federal Credit Union that you do not have to pay it.

#3 Seller Can Contribute to Closing Costs

Closing costs on every home loan can add up to thousands of dollars. It can be up to 5% or so of the loan amount! That is a lot of money to come up with when you are a first time home buyer. But with Navy Federal, you can get up to 6% of the loan amount from the seller if he agrees to do it.

Not every seller is going to agree to cover some of your closing costs; we are in more of a seller's market in 2018 and it is less likely that sellers would agree to pay closing costs. But there are always some sellers out there who need to sell their home fast, so this is an option that could save you a lot of money.

#4 Funding Fee Can Be Waived

Most Navy Federal Credit Union loans have an upfront funding fee of 1.75%; this is similar to the upfront funding fee required by VA loans. But you can have this fee waived if you agree to have .375% added to your interest rate.

#5 Fixed Rate and Adjustable Rate Loans Available

Most of the people who get a loan through Navy Federal get a fixed rate, 30 years or 15-year loan. But there are adjustable rate mortgages available such as 1/1/ 3/1, 5/1, 7/1, 10/1 and 2/2. The reason that NFCU offers so many adjustable rate loans is that military families are often required to relocate every few years. So these various loan options give military members more flexibility.

Adjustable rate loans also may be more desirable in 2018 and beyond as mortgage rates are higher than the last few years. A fixed rate loan may be over 4.5% today, but you can get a lower rate with an ARM.

#6 Loan Origination Fee Can Be Rolled into Loan

Navy Federal has a 1% loan origination fee that you can roll into the loan or it can be waived if you agree to pay a higher rate. This reduces the amount that you need to close the loan.

Navy Federal Credit Union loans are a good option for the first-time homebuyer who is in the military, so be sure to see if their loan products work for your needs.