How to Budget for Cayuga Lake Homes for Sale Using the Right Financing?

 Cayuga Lake homes for sale present an amazing opportunity for individuals and investors to own beautiful properties featuring scenic views and luxury ambience. 

In November 2024, new listings dropped by 21.6% compared to the previous month. This made prices go up because buyers had fewer homes to choose from and had to compete from the available ones.

In such situations, the availability of effective financing options becomes a prominent option to close deals smoothly. This blog will inform you about the various financing options available in the region so that you can make an informed budgeting plan.

Financing Options for Property Purchase in New York

  1. FHA Loans

These are government-backed loans that are suitable for and mostly preferred by first-time buyers because they have lenient qualifying requirements. They can be even with a slightly low credit score, where a down payment can be as low as 3.5%.

  • Credit Score: Requires a score of 580+ for a 3.5% down payment and 500+ with a 10% down payment.

  • Mortgage Insurance: FHA loans require two types of mortgage insurance: an upfront premium (1.75%) and annual premiums that vary based on the loan terms.

  • Recent Interest Rates (2024): FHA loan rates typically range from 6.5% to 7.0% for a 30-year fixed-rate mortgage. Rates can vary based on credit score and other factors.

  1. Conventional Loans

These are not government-backed loans and are provided by private banks or lenders. They are of two types: confirming and non-confirming. They follow the credit score and down payment minimums set by Fannie Mae and Freddie Mac, which are the government-sponsored enterprises.

  • Down Payment: Typically it is recommended to put down 20%; however, a down payment of 3.5% qualifies you for the conventional loan. 

  • Credit Score: Usually 620 is required for approval.

  • Loan Limit: The Federal Housing Finance Agency (FHFA) sets the limit every year in November. The conforming loan limit for 2024 is $766,550, which is a 5.5% increase from the previous year.

  • Private Mortgage Insurance (PMI): If the down payment is less than 20%, PMI is required, but it can be removed once equity reaches 20%.

  1. Home Equity Loans

If you already have a home and want to purchase secondary Cayuga Lake homes, you must explore home equity loans or lines of credit (HELOCs). These loans allow you to borrow against the equity of your primary home, which is typically lower-cost financing. 

  • Interest Rate: Typically ranges between 8 and 9% depending on factors like credit score and down payment.

  • Source: Discovery and US Bank are the 2 most favorable sources for getting loans. Both require a minimum 680 credit score to get approved.

  • Duration: A loan can be 5-20 years long. A 30-year option is also available.

  1. Bridge Loans

These are short-term loans, and so they can come with a higher rate of interest. They are typically taken for 2-3 weeks but can extend up to 12 months. If you’re looking for Cayuga Lake homes for sale but need to sell your current home first, a bridge loan can help you make the transition smoothly.

  • Sources: Australian Mutual Bank, Firstmac, and Bank Australia 

  • Repayment: Can be repaid in a lump sum or through monthly payments. Some bridge loans are interest-only during the loan term.

  1. Mortgages

There are 2 types of mortgages available for you if you’re considering financing Cayuga Lake homes for sale, i.e., fixed-rate mortgages and adjustable-rate mortgages. Fixed-rate mortgages remain the popular choice due to their favorable terms, where the interest rate remains the same throughout the loan period.


Interest Rates: Typically range between 6-7% for 30-, 20-, 15-, and 10-year fixed-rate mortgages. Adjustable-rate mortgages (ARMs) can start lower but may increase over time.


You can also pay prepaid interest known as mortgage points. 1 mortgage point is equal to 1% of the total loan amount.

Conclusion

Though financing is one of the critical aspects of buying a home, the process involves many complications, such as finding the right property, paperwork, and regulations. For this, it is important to work with a trusted real estate agent or company. 


If you’re looking to invest in Cayuga Lake homes for sale, get in touch with Mary St. George. They can provide multiple options of property available in the city while assisting you in the process of transactions. Visit their website to learn more.

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