New MaineHousing mortgage options expand home buying opportunities
March 3rd, 2008. AUGUSTA – New mortgage options offered by the Maine State Housing Authority (MaineHousing) make it easier for more Maine people to buy homes of their own. Effective March 3, borrowers using a MaineHousing mortgage have the choice of a 30-year or 40-year term, with no points or two points.
“Borrowers can choose the options that are right for them,” said MaineHousing Director Dale McCormick. “The new options, combined with our low interest rates, low to no down payment, and down payment and closing cost assistance, will help more Maine people than ever benefit from our mortgages.”
“These new loan options will help our real estate industry,” said Governor John E. Baldacci. “We hear of tightening credit standards, making it more difficult for homebuyers to get loans, but MaineHousing has mortgages available that make home buying affordable.”
“This is a great time for people who have been thinking of buying a home to act,” Baldacci added. “There are many homes on the market, home prices in many areas are at or below last year’s prices, and interest rates are low. MaineHousing borrowers can purchase a home with little or no out-of-pocket costs, and with a fixed monthly payment they can afford.”
MaineHousing mortgages usually have interest rates below market rates for similar products, which mean lower monthly payments. The current MaineHousing note rate for a 30-year term and no points is 5.55% (6.168% Annual Percentage Rate).
MaineHousing expects its new no point mortgage option to be very popular. Discount points can be paid at loan closing to reduce the interest rate, but many borrowers prefer no points because less cash is required to get the mortgage.
The new extended payment term means a borrower can choose to repay the mortgage over 40 years instead of the usual 30 years. A longer payment term increases interest paid over the life of the loan, but lowers monthly payments. This makes homeownership a reality for people who otherwise could not afford it.
Most MaineHousing mortgages require 0-5% down payment. If the down payment and closing costs are too much, eligible borrowers may use Maine Assist, which provides help paying those costs. MaineHousing mortgages also come with payment protection for unemployment. The Maine HOPE program – Home Ownership Protection for unEmployment – may make four monthly mortgage payments on behalf of eligible MaineHousing borrowers “It’s a little extra protection for our borrowers and their homes,” McCormick said.
MaineHousing loans are available through more than 30 participating lenders to new home buyers or people who have not owned a home in the past three years, and to veterans and active duty military, even if they are homeowners. Most Maine households are income-eligible.
“More people are eligible for a MaineHousing mortgage than you think,” McCormick noted. “We offer a quality loan product that Maine people have trusted for over 30 years. I hope that more Maine people take advantage of it.”