Mortgage in Delaware
Delaware is a small state with a significant impact. It was the first state in the union to ratify the United States Constitution. It's also a favorite for incorporations, thanks in part to its rich legal history, favorable taxes, and the Court of Chancery. Delaware has no sales tax, which means that residents save on almost any purchase relative to most other states. Housing is on the pricier side but still affordable, and you can always use the Delaware mortgage calculator to see how much home you can afford!
If you're looking to live in the oldest state in the union, here's what you need to know about your mortgage options.
Delaware Mortgage Calculator: See Your Options
If you're looking to buy a home or a condo in Delaware, there are three mortgage options you need to know.
- Delaware conventional mortgage: For those looking to live in Delaware, conventional mortgages are the most popular option. Requiring a credit score of 620 or higher, conventional mortgages come in one of two flavors: conforming and non-conforming. Conforming loans are smaller and receive backing from Freddie Mac and Fannie Mae, so they're easier to obtain. Non-conforming loans are higher dollar values and typically require a higher down payment and months of mortgage payments in reserve. With Delaware's housing costs, non-conforming loans are increasingly common.
- Delaware FHA mortgage: FHA mortgages are ideal for Delaware buyers, assuming you can find a property that works for it. They require as little as 3.5% down and a minimum credit score of 580. If you have a credit score between 500 and 579, you can still obtain a mortgage. You'll need 10% down, though. The only downside is that they have private mortgage insurance for the loan's duration, but you can get out of that by refinancing!
- Delaware VA mortgage: Buying a home is a little easier for veterans, thanks to VA loans. These mortgages offer attractive rates, no private mortgage insurance, and you can get a loan with as little as 0% down. The only downside is that it requires a decent credit score - typically 660 or higher.
With the conventional and FHA loans, you'll need at least some money for a down payment and closing costs. Even if you don't have that, homeownership might still be within reach, thanks to generous Delaware first-time homebuyers assistance!
First-Time Homebuyers in Delaware
The Delaware State Housing Authority offers three primary programs for first-time homebuyers (more information is available on the excellent Kiss Your Landlord Goodbye website).
A DSHA mortgage is a 30-year, fixed mortgage with low interest rates. These loans work with all types of mortgages. The state guarantees these loans, so you get a better deal!
Eligibility Criteria: You must have a credit score of 620 and a maximum debt-to-income ratio of 45% for credit scores below 699 (no maximum for credit scores 700 or above). The maximum loan is $417,000.
Down Payment Assistance and Closing Cost Help
People who qualify for the homeownership loan criteria above may also add a no-interest second mortgage loan of 2%-5% of the overall loan amount.
Eligibility Criteria: If you qualify for the homeownership loan, you'll be eligible for this!
You can claim up to 35% of the interest you pay as a special federal tax credit (up to $2,000 per year). This credit reduces the tax you owe, dollar-for-dollar!
Eligibility Criteria: Buyers must occupy the home as their primary residence and meet maximum income and property price thresholds.
Delaware Mortgage Calculator: See How Much You Might Spend To Live in Delaware
If you're looking to make a move to Delaware, try our Delaware mortgage calculator. It will give you a good idea of what it'll cost per month for housing. Once you know what loan type and assistance you'll have, you can use that information in the calculator. You'll get a good idea of what you'll pay!