Applying for a Loan First-Time Buyers

How a Mortgage Broker in Bethesda Helps You Save

Negotiating a home purchase is no easy task. You’ll have to navigate the complexities of the mortgage market and the real estate market simultaneously. It’s important you put enough time and energy into securing a great rate. But with all the moving parts, it can feel overwhelming. This is where a mortgage broker can provide invaluable guidance and assistance. Mortgage brokers work on your behalf to negotiate better rates and guide you through the mortgage journey. It’s important to understand what a broker brings to the table when you decide to work with them during your home search. Here’s how a mortgage broker in Bethesda can help you save.

What Does A Mortgage Broker Do?

A mortgage broker operates as a negotiator between those looking to borrow and the mortgage lenders offering the loan. They will assist you in finding the best mortgage to fit your situation and financial circumstances by finding competitive rates and mortgage terms. Before shopping for a home, a mortgage broker will help you find what size of mortgage you will qualify for, thus helping guide and refine your home search. The main goal of a mortgage broker in Bethesda is to assist you in finding the lowest mortgage rates available from a lender with a positive reputation. 

The Advantages of Working with a Broker

Having a mortgage broker in Bethesda guide your mortgage process will initially save you time and effort by performing the research on rates and fees as well as finding a lender that will specifically benefit your personal situation. Their knowledge of the mortgage industry will help you to avoid mistakes and fraud, which would otherwise bring the entire process to a screeching halt. Mortgage brokers will also assist you in the pre-approval process so that you can begin a home search with an idea of what you can afford. The main advantage of having a mortgage broker in Bethesda is their ability to save you a significant amount of money on your mortgage. 

How A Mortgage Broker Saves You Money

Throughout managing your mortgage process, a good mortgage broker will take every route possible to reduce your total expenditure. When negotiating with your lender, a mortgage broker in Bethesda will push to waive or reduce fees associated with the mortgage process. These fees can quickly add up and the option to reduce them will greatly impact your final cost. Mortgage brokers often have access to a large network of lenders. This allows mortgage brokers to choose from a variety of lenders with terms that are in the buyers’ best interest or a lender that will give you a loan when you have specific circumstances that would otherwise prevent you from securing a loan from typical lenders. When creating the loan terms, mortgage brokers will negotiate a more advantageous position uniquely for your situation as the buyer. Knowing the potential costs that you will face in your mortgage process will better prepare you to financially handle them and a proper mortgage broker will make you aware of additional costs you may incur. During the negotiation process, your mortgage broker in Bethesda will represent you and ensure that you receive a beneficial interest rate and mortgage term. With most mortgages lasting 15-30 years, receiving better terms on your loan can potentially save you tens of thousands over several decades.

Professional Mortgage Brokers in Bethesda Maryland

If you are interested in getting the best mortgage terms and interest rates available to you, Federal Hill Mortgage is here to help. Our mortgage brokers will work hand in hand with you throughout your entire mortgage process, offering expert advice and comprehensive guidance in order to secure you an advantageous mortgage. Take on your mortgage with the confidence that comes with having a professional mortgage broker in your corner. Call or contact Federal Hill Mortgage to get started today.

First-Time Buyers Home Buying Advice

What Are Closing Costs in Maryland?

Mortgage calculators are an excellent tool to help you estimate what you’ll spend on a home. We offer several of these to prepare prospective buyers for homebuying expenses. However, there are some costs that aren’t factored in upfront. Called closing costs, these are expenses associated with finalizing your home purchase. It’s important to understand what each of these are, and how much they can cost. This helps avoid any last-minute surprises that can throw a wrench in finalizing your purchase. Below you can explore all of the potential closing costs in Maryland you might face.

Which closing costs apply to your mortgage depends on location, the size of the home, and the type of mortgage that you take on. Even though you will not have to pay every closing cost that is listed, it is best to become knowledgeable about all of the potential expenses in order to prepare yourself as much as possible.

What are Seller Concessions for Closing Costs in Maryland?

While the buyer is responsible for paying the majority of the closing costs, the seller also has the ability to take some on themselves. These are called seller concessions and they exist to incentivize the buyer. Sellers are only allowed to pay up to a certain amount in closing cost assistance. This amount is based on the type of loan, how many people are living in the home, and the percentage of the down payment. For conventional loans in primary residence homes, those who put a downpayment of 25% or more can receive up to 9% of their home’s purchase price or appraised value. Those who put down 10-24.99% can get up to 6% while down payments of 10% or less can only get 3%.

If it is your second home, the return percentages are the same except for those who put in a downpayment of less than 10%. In this scenario, they would not be eligible to receive any seller concessions. If it is an investment property, you may only receive up to 2% of the home’s sale price in seller concessions regardless of downpayment. In the case of FHA loans, you may only receive up to 6% of the home’s value in seller concessions. VA loans have a more unique approach. They allow up to 4% of the purchase price to be placed into an escrow account, however, the seller may provide an unlimited amount towards closing costs such as credit report fees, discount points, origination fees, and appraisal. 

How Much are Closing Costs in Maryland?

Closing costs are different for everyone. Depending on where the home you purchase is located, which government requirements apply to you and which lender you chose. Before you sit down with the seller to sign the closing documents you will receive a closing disclosure that goes over all of your closing costs. Before going into your closing meeting, it is highly recommended to develop a solid understanding of all of your potential closing costs so that you may be properly prepared.

Application Fee

The application fee is a charge from your lenders for them to process your loan request. This non-refundable fee can be up to $500.


The appraisal is when the lender sends out a professional to determine the value of the desired home. This is typically outsourced to a third party. The amount that they determine the home is worth will dictate the amount you are able to receive for a loan. They range in price but expect to pay around $450 for an appraisal.

Attorney Fee

You are required by Maryland law to have an attorney present during the home sale proceedings. They will assist in organizing your paperwork as well as managing your closing. The price for an attorney highly depends on the attorney you decide on as well as local rates.

Closing Fee

In Maryland, you are legally responsible for having an attorney conduct and sign off on your closing meeting. These fees again vary depending on the attorney and your local rates.

Courier Fee

Mortgage documents must be transported and with that comes a courier fee of around $30.

Credit Reporting Fee

To receive a loan for your home your lender must first run a credit score check. These typically cost about $25.

Discount Points

Discount points are one of the best ways to decrease your interest rate. By paying more upfront, you have to option to purchase discount points which will greatly reduce the amount of interest you pay over the life of the loan. If you can comfortably afford it, discount points will save you a significant amount of money over a longer period of time.  

Escrow Funds

A valuable asset, some lenders will require you to deposit money into an escrow account in order to cover your expenses for several months after signing the closing documents. The lender will make payments on necessary expenses for you. 

FHA Mortgage Insurance

FHA loans require you to pay for mortgage insurance. This will cost you around 1.75% of your total loan. It is not all paid at closing, but in monthly installments during your loan.  

Flood Certification and Flood Insurance

Purchasing a home that is prone to flooding? You may be required to pay around $20 for a flood certification. If your home is within a federally designated floodplain, you will also be legally required to obtain flood insurance.

HOA Transfer Fee

If the home you are buying is in a community that has a homeowners association, you or the seller may have to pay a fee to transfer the HOA’s fee collection and homeowner information. 

Homeowners Insurance

Required by most lenders, homeowners insurance is crucial to avoid having to pay for damages to your home. A majority of lenders will require that you pay for a year of homeowners insurance when you close. The cost of homeowners insurance can be expected to be $35 for every $100,000 in home value, every month. 

Loan Origination Fee

Expect to pay around 1% of your loan amount towards origination fees. These cover the expense required to process and underwrite your mortgage loan. 

Lender Title Insurance

If you lose your home to a claim on the title, the lender’s title insurance protects the lender from loss. This is a one-time payment due at closing that can cost up to $1000.

Lead-Based Paint Inspection

Any home built before 1979 is required to have a lead-based paint inspection performed. These inspections can cost around $300.

Pest Inspection Fee

A pest inspection fee is required by law as one of the closing costs in Maryland. These usually cost around $100.

Private Mortgage Insurance

If you decide to put less than a 20% down payment on your conventional loan, you will be required to pay for private mortgage insurance. Private mortgage insurance usually costs around $50 for every $100,000 in home value.

Property Tax

It is not uncommon for a lender to require a buyer to pay a full year’s worth of property taxes as a closing cost. The amount of property tax you will owe depends on the home’s location and value. 

Rate Lock Fee

If you wish to lock in your interest rate during the time between preapproval and closing, your lender may offer you the option to lock your rate by paying a one-time fee. These can either be free depending on the rate locks terms or .25% – .5% or your loan’s total value. 

Recording Fee

When you purchase a home, the local government has to update its public records. This usually costs around $125.

Title Search & Transfer Fees

A title search fee will look for and find any current claims on the property you are purchasing and the transfer fee will cover the cost of changing the title over to you. These can cost up to $400.

Underwriting Fee

Your lender has to verify that your loan paperwork is accurate. For this, expect to pay up to $800.

How to Budget for Closing Costs in Maryland

As you can probably tell by now, closing costs in Maryland are abundant. With the process of mortgaging a home being so complex, all of the moving parts and involved parties must be compensated for their assistance. To budget for closing costs, the best thing you can do is be prepared. Quantify all of your potential closing costs and make sure that you have more than enough ready to pay for them. Maryland has the ninth-highest average closing costs in the county, coming in at around 2-5% of the home’s final purchase price. With that number in mind, you can properly allocate funds to pay for the closing costs in Maryland. 

Professional and Comprehensive Mortgage Lenders and Brokers

If you are ready to purchase your dream home, do it with the confidence that comes with having Federal Hill Mortgages’ team of professional lenders and brokers working with you. At Federal Hill Mortgage, we work closely with all of our customers to ensure that they receive the best and most favorable mortgage terms available. Call or contact us today to begin the journey toward securing the home of your dreams!

First-Time Buyers Home Buying Advice

Tips for Home Appraisal in Maryland

A home appraisal is one of the most crucial aspects of the home sale process. It determines what the lenders are willing to loan for the home and sets the maximum for what you will receive for your home. Thankfully, there are simple steps that you can take to increase the appraised value of your home. These simple and easy methods won’t take much time and effort but the result can drastically improve your home’s value during a home appraisal in Maryland. 

Understanding What Appraisers Look For

To be able to know how to prepare for a home appraisal in Maryland, you must first understand what appraisers are looking for. Appraisers are supposed to not only look over the condition of the home but also at the local market and what comparable homes in your area have sold for in the past 6 months. Their unbiased opinion places your home in one of several “C” categories. Before we get into how to improve your chances of getting a higher appraised value of your home you must first understand which level your home fits in. 

C-1: A never occupied, brand-new home

C-2: Home that has undergone major renovations, major components replaced after the home was gutted

C-3: No signs of neglect, suitable condition. 95% of homes fall in this category.

C-4: Less than livable home with signs of disrepair

C-5: Unfit for occupation on day one, major disrepair, disconnected utilities and/or pests

The amount that your appraiser says your home is worth sets the limit for what your lender will be willing to loan you. To get the most out of your home appraisal in Maryland, be sure to follow the following 8 steps to improve the value of your home before the appraisal takes place. 

How to Improve Your Homes Value

  1. Do Not Get Your Own Appraisal, Let Your Agent Give You An Assessment

Getting your own appraisal will help you in identifying areas of potential improvement. However, this is not recommended. The only appraisal that really matters is the official one that was ordered by the buyer’s lender. You’re better off relying on your agent to give an assessment and save on the cost of an extra appraisal.

  1. Tidy Up the Exterior & Yard

Cut the grass, trim the bushes and remove debris from your yard. The exterior of the home is the first impression that the appraiser will have on your home. To have a positive effect, make sure that the exterior of your home is tidy and clean.

  1. Research Local Comparable Homes That Have Recently Sold

The best way to gain an initial idea of what your home is worth is by looking at the public records of recently sold, comparable homes in your area over the past 6 months. If you have hired a real estate agent, they may be able to provide a comparative market analysis that contains all of this information.

  1. Make Small Repairs and Clean the Home

If you have been putting off making small repairs on your home now is the time to do it. Something that may only take a few dollars to fix can make a significant difference in your home’s appraisal. You will also want to perform a deep clean on the interior of your home as it will have a positive impact on the appraisers’ opinion of your home. 

  1. Stage The Home How You Would For a Showing

When a real estate agent prepares a home for a showing, they make the effort to stage the home and make it look as valuable and desirable as possible. This should be mimicked when your preparing for a home appraisal as it will have the same effect. 

  1. Make it Easy for the Appraiser to do their Job

Allow the appraiser to do their job by staying out of their way. They know how to do their appraisal and they do not need you hanging over their shoulder during the entire process. Make their job easier by opening up any locked doors or entryways.

  1. Provide a List of Significant Upgrades

In addition to making their job easier by providing easy access and staying out of their way, you will also want to include a list of significant upgrades that have been done to your home. Include things like major home renovations, integral system upgrades, and any other significant work that will work to improve the appraised value of your home. 

  1. Show the Appraiser If You Have Multiple Offers

If you have any offers on your home by the time your lender sends an appraiser, it’s important to make them aware. If you received an offer that was higher than what the appraiser values your home at, they may potentially reconsider your home’s worth.

Making an Appeal on Your Maryland Home Appraisal

If you disagree with your home’s appraised value, you may want to consider making an appeal. There are several routes to appealing an appraisal and which one you decide on depends on your situation. If you notice or are inclined to believe that there are errors in the appraisal, you should appeal for an appraisal revision. If there are not any mistakes, the appraisal will stand. If you know the amount that the buyer is putting as a down payment, you can negotiate a new price to cover the appraisal gap, given that there is one. Next, if you are trying to expedite the process and sell the home quicker, you can lower the price. Finally, if all else fails and you are not pleased with the appraisal, you can back out altogether and re-list the home. The next appraiser may give you a better or worst price, so it’s a bit of a gamble. 

Take Control of Your Home Sale with Mortgage Professionals

Buying or selling a home can be a daunting process, especially if you do not have any experience doing so. Instead of going in blind, Federal Hill Mortgage is here to help. Our team of experienced mortgage experts will guide you through every step of the way, offering transparent guidance in order to help you proficiently secure a new home or sell the one you already own. Give us a call or visit our website to get in touch with us and get started on benefiting your mortgage or home sale with Federal Hill Mortgage today!

First-Time Buyers Real Estate Advice

How to Choose the Right House as a First Time Home Buyer in VA

Purchasing a new house is an exciting experience that marks a major accomplishment a for first time home buyer in VA. This excitement can easily lead an inexperienced buyer into a home that seems great but, in reality, is far from the right choice. Buying a home is a long-term investment and to preserve that investment, one must find a balance between wants and logical, realistic needs. By going over several key factors that are easily overlooked, first time home buyers in VA stand to make a decision on a home that will be the right one for them.


downtown Richmond VA

Location is by far the most important factor that should be considered by a first time home buyer in VA. As the most valuable asset in a home purchase, the location of the home is one that the buyer does not have as much control over improvement as they would with the actual home. When looking for a beneficial location, evaluate the local schools, the neighborhood, and any taxes, dues, and fees associated with the location of the home. If these categories check out then it is a solid indicator that the land value will not decrease. 

Size & Space to Expand

When considering a home’s size for long-term residence, try to imagine any expansions you might want down the line. For these expansions, you are going to need to have the space for them. This can be space for furniture such as dining tables or beds or a garage for storage. If you have other people living with you or if are expecting to have more in your home, you are going to want to make sure that the available space is appropriate for the number of residents. In short, make sure all of your things fit and if you plan on making future expansions, make sure you have the space to expand.  


If you are planning on purchasing a home, it is very important to consider the renovations that will be required to bring the home up to your preferred standard. Try to imagine yourself living in the home and take notice of anything that would bother you or that you would like to be updated. It is crucial to be able to know what renovations you will be able to do yourself and which renovations you would have to hire a professional contractor for. Also, be sure to have realistic expectations for the true potential of the home, and don’t let your imagination consume this reality. Renovations can raise a home’s value and make the resident happier with the home but, if the resources and money required to make these necessary renovations outweigh the worth it adds, it might be best to look at other options.

Luxuries to Consider

Luxuries are things that come with a home that is not necessary for occupation and instead add a level of convenience or comfort to a residence. For some, certain luxuries might be a necessity. Being able to determine if a home feature is a luxury or a necessity will assist you in deciding if that home is right for you. For example, some first time home buyers in VA must have adequate parking while some view it as an unnecessary luxury that just boosts the sales price of a home. When deciding if a residence will be able to make a good home for you, be sure to contemplate if the luxuries that come with the home are important to you.

Purchase Your First Home With Federal Hill Mortgage

First time home buyers in VA have a lot to consider when deciding on their first home. Finding the right balance between a solid investment and a home that you are comfortable in is key in choosing your first home. With it being your first experience in purchasing a home, having a team of mortgage professionals guiding you through the process serves as an invaluable asset. If you are a first time home buyer in VA, contact the team at Federal Hill Mortgage to get expert real estate guidance and the professional assistance you need to get an advantageous deal on your new home. Want to learn more? Check out our reviews.

First-Time Buyers Home Buying Advice

Tax Breaks for Homeowners and Buyers

Tax breaks are an essential part of homeownership. They incentivize more US residents to purchase by lessening the financial burden of homeownership. To take advantage of the available tax breaks, you first have to understand what is available to you and what qualifies as a tax break that can maximize your savings. With a wide variety of tax breaks for homeowners available, there’s no reason you shouldn’t be claiming them on your return.

Two Types of Deductions: Standard & Itemized

The two main types of tax deductions are standard and itemized deductions. Standard deductions are available to all filers and are based on set amounts depending on how you file. Single and married individuals filing separately receive a standard deduction of $12,550 while married couples filing together will receive a standard deduction of $25,100. Itemized reports are when you file your own itemized deductions and forgo the standard rate. To take full advantage of your itemized deductions, make sure that the total amount of your itemized deductions is larger than the standard deduction that is available to you. 

10 Tax Breaks for Homeowners and Buyers

There are a wide variety of available tax breaks that can be used on your itemized deductions. To ensure that you get the most out of your tax returns, itemize as many deductions as possible. 

1. Property Taxes

Property taxes are tax deductible and can be included in your itemized tax report. A married couple filing jointly can receive up to $10,000 off of their property taxes and a separate or single filer can receive up to $5,000 off of their property taxes.

2. Mortgage Interest

Being able to deduct mortgage interest is one of the most important tax breaks for homeowners to take advantage of. Mortgage interest can quickly add up and make the difference for a prospective homeowner in being able to afford the mortgage. Thankfully, a single filer or married couple filing jointly can claim up to $750,000 and a married couple filing separately can claim up to $350,000 for each party. 

3. Home Equity Loan Interest

Similar to mortgage interest, the interest paid towards your home equity loan or HELOC can be itemized as a tax deduction. The only difference is that you can only access this deduction if the money from the home equity loan was used for home improvement.

4. Discount Points

Discount points are an option for homeowners where they may purchase these discount points to decrease the interest rate on their mortgage. You may deduct the cost of the discount points but loan origination points are not included. 

5. Mortgage Insurance

Some loaners will require you to pay for private mortgage insurance or PMI to protect the lender from liability if you are not able to pay for your mortgage. This too may be included on your itemized tax return. 

6. Necessary Home Improvements

Necessary is the keyword in this tax break for homeowners. These “necessary” home improvements are typically for home improvements that benefit a disabled person or are some sort of medically related improvement. While it is not completely limited to medical improvements, it is difficult to make the case for other types of home improvements. 

7. Capital Gains

When you sell the home that you own, hopefully, you will have made a profit. These capital gains can be included on your itemized tax return but only if the home was your primary residence for two out of the five previous years. A married couple filing jointly can receive up to $500,000 while an individual filer can receive up to $250,000. This is one of the largest tax breaks for homeowners and should be considered when selling your home. 

8. Home Office Expenses

If your primary place of work is at your residence, you may qualify for a home office expense deduction. This deduction does not apply to those who sometimes work from home or have a home office but rather to those who operate a business primarily from your residential business space. 

9. Deduction of Rental Expenses

If you choose to rent out a portion of your home then you can qualify for a deduction from the cost of rental expenses. Instead of directly deducing these expenses from your itemized report, the cost will be subtracted from your taxable rental income. A rental expense can be considered an expense that is related to operating and maintaining the rented portion of your home. 

10. Credits for Energy-Saving Improvements

Both the federal and state governments are adamant about providing incentives to get homeowners to have energy-saving improvements installed on their property. Tax breaks for homeowners are no exception as the federal government offers a 30% tax credit for the cost of energy-efficient equipment. Currently, in 2022, an additional $500 tax credit is offered for the cost of installing energy-efficient appliances and upgrades to things like doors, roofs, and windows.

11. First-Time Homebuyer Tax Credit

The first-time homebuyer tax credit is a government-funded program that assists first-time buyers to pay for their new homes by reducing the amount of taxes owed. It does not have to be your first time purchasing a home to qualify. You are considered a first-time buyer as long as you haven’t owned a home or have been a cosigner, in the past three years. Those who are eligible can potentially receive a tax credit worth up to 10% of the home’s purchase price with a maximum threshold of $15,000.

Maximize your Tax Savings with Federal Hill Mortgage

By taking full advantage of the available tax breaks for homeowners, you could potentially save thousands of dollars on your tax returns. Using all of the tax breaks listed above can be tricky as the complexities of filing for deductions can often be daunting to someone who is not familiar with itemizing their deductions. Thankfully, Federal Hill Mortgage is here to help. Our team of mortgage professionals will walk you through every step of the mortgage process offering expert guidance throughout. If you would like to ensure that you maximize your tax savings, call or contact the team at Federal Hill Mortgage today to get started. 

First-Time Buyers Home Buying Advice

Assistance and Incentives for First-Time Home Buyers In Maryland

Buying your first home can be a daunting process, especially when common knowledge dictates you need a 20% down payment. However, this is far from the truth. With all of the available grants and incentives offered at the state, federal and private levels, affording your first home becomes much more feasible. By understanding all of the available incentives and grant options, you will be able to find out what you qualify for and make an educated plan to purchase your first home. With a wide variety of options, it is important to find out which one benefits you the most. To do so, we will go over all of the grants and incentives offered to first-time home buyers in Maryland. 

Maryland First-Time Home Buyer Programs

Maryland Mortgage Program

Offered by the Maryland Department of Housing and Community Development, or DHCD, the Maryland Mortgage Program offers first-time home buyers in Maryland competitive loan terms, which can make the difference between being able to purchase and continuing to rent. To qualify, you don’t have to be a first-time buyer but you must not own any real estate when you apply. You also must purchase a home in the state of Maryland, have a household income at or below the local income limit, choose from one of the DHCDs lenders and live in the house once you have bought it. 

1st Time Advantage

Specifically for first-time home buyers in Maryland, the 1st Time Advantage program offers competitive interest rates. Within the 1st Time Advantage Program, there are options for down payment assistance, either $5000 or 3% of the purchase price.

SmartBuy 3.0

The SmartBuy 3.0 program assists first-time home buyers in Maryland with student debt in purchasing a home. SmartBuy financing will give 15% of the home’s purchase price so that the borrower can pay off their outstanding student debts. This program is limited to $30,000, comes with zero interest, and is forgivable over 5 years. To qualify, you must have at least $1000 in student debt, your entire student loan must be paid off by the time you purchase, earn a homeownership counseling certificate, live in the home as your primary residence and contribute at least 5% of the sales price from your funds.


If you or a member of your household is currently living with a disability, you qualify for Maryland’s HomeAbility Program. This program offers two separate loans. The first is one for 80% of the home’s purchase price and another zero-interest loan for up to 25% of the price. HomeAbility comes with no mortgage insurance requirement and lower limits than other loan programs. 

Maryland First-Time Home Buyer Loans & Grants

Partner Match

Partner Match allows participating partners to provide financial assistance to borrowers who are eligible and meet the criteria set by the partner. The DHCD matches the funds up to $2,500 as a 0% deferred loan which must be repaid when the home is sold or when the first mortgage ends.

Flex 5000

Offered by the Maryland Mortgage Program, the Flex 5000 is a $5000 grant that can be used for a down payment or closing costs. To qualify you will need a credit score of at least 620. All of the flex loans and grants provided by the Maryland Mortgage Program come with zero percent interest and can be repaid once the first mortgage ends.

Flex 4% Grant

The Flex 4% grant is offered through the Maryland Mortgage Program and includes an outright grant of 4% of the total loan amount. This grant is used for down payment or closing costs and does not need to be repaid. 

Flex 3% Grant

Similar to the Flex 4% grant but easier to qualify for, the Flex 3% grant is 3% of the total value of the mortgage loan and does not have to be repaid. 

Flex 3% Loan

Another form of down payment or closing cost assistance is in the form of a loan, worth 3% of the first mortgage and is structured as a 0% interest deferred on the second lien. 

Eligibility for Maryland Mortgage Program Flex Loans and Grants

To be considered eligible for the Maryland Mortgage Programs Flex Loans and Grants you must have completed a homeownership counseling program, not own any other properties at the time of closing, live in the home as your primary residence, have a household income below the Maryland Mortgage Program limit and your mortgage cannot exceed Maryland Mortgage Program limits. The Maryland Mortgage Program is not limited to first-time home buyers in Maryland, however, it is a valuable tool for making your first home purchase a reality. 

Federal First-Time Buyer Programs


FHA Loan

An FHA Loan is a mortgage backed by the Federal Housing Administration. Their main attraction is their low down payments, starting at only 3.5%, and a requirement for credit scores as low as 580. If you can afford to pay 10% or more down, the credit score range decreases to the 500-579 range. FHA Loans have total home price limits set by the federal government, as well as income limitations. FHA Loans may require private mortgage insurance depending on the amount you are able to pay down.


A USDA Loan is reserved for those wishing to purchase a home in a region that is designated as a rural area. These loans are for low to moderate-income households that require zero down payment, at least a 640 credit score and offer low mortgage insurance rates. 

Conventional 97

With a Conventional 97 Loan, you can borrow 97% of the home’s cost, resulting in a 3% down payment. Conventional 97’s are a good alternative to FHA loans if you have good credit and want a lower down payment. To qualify for a Conventional 97, you must have a credit score of at least 620, meet income limits, and plan to live in the purchased property as your primary residence.

VA Loan

Reserved for veterans and active service members, a VA loan requires no down payment and a credit score of at least 620. VA loans have some of the best mortgage attributes, with competitively low-interest rates, limited closing costs, and no requirement for private mortgage insurance.  

Local and County Based Incentives

happy family


Buying Into Baltimore

Buying into Baltimore works like a lottery, providing $5000 for downpayment and closing costs that are forgiven over five years to 20 lucky winners every year. This program has no household income limits.

Baltimore City Employee Homeownership Program

A $5000 loan is offered to full-time, permanent Baltimore City staff to purchase a home. The loan is forgiven over five years.

BayBrook Boost

Reserved for those purchasing a home in the Brooklyn and Curtis Bay neighborhoods in Baltimore. Depending on your household income, you can receive a $10,000 or $20,500 interest-free loan with no monthly payments. You must pay this loan back when your first mortgage ends. 

Columbia Down Payment Assistance Program

Provided by Howard County, the Columbia Down Payment Assistance Program offers interest-free loans with no limit where the borrower pays a low rate of 2 points below the primary mortgage interest rate. The loans are due at the end of the first mortgage.

Germantown First-Time Home Buyers

Provided by Montgomery County, Germantown first-time home buyers can borrow 5% of their purchase price up to $10,000 using the Revolving Closing Cost Assistance Program. This comes as a loan with a 5% interest rate that the borrower must pay back in equal installments over ten years with their main mortgage. 

Buy Your First Home With Help From Maryland’s Best Mortgage Brokers and Lenders

As you can see there are various incentives and assistance options available to assist in purchasing your first home as a first-time homebuyer in Maryland. With so many choices, it may be difficult to boil down which is best for you. Thankfully, at Federal Hill Mortgage, our team of mortgage professionals is ready to provide you with transparent guidance so that you can get the most out of the incentives and assistance programs. We will be by your side every step of the way so that every aspect of your mortgage is clearly explained and expert advice is given. Get the most out of your first home-buying experience with Federal Hill Mortgage. Call or contact us today to get started.

First-Time Buyers Home Buying Advice

How to Find the Right Realtor as a Montgomery County First Time Home Buyer

Finding the right realtor to facilitate your first-time home purchase can have an immense impact on the outcome. Who you choose dictates if you get the house, how much you end up paying, what homes are found for you to choose from, and many other crucial factors that it would be best to have handled by an experienced realtor who retains your best interest throughout the buying experience. As a Montgomery County first time home buyer, finding the right realtor can be difficult but by following the information provided here, your chances of finding a well-intended realtor are significantly increased.

What is a Realtor?

A realtor is someone who facilitates the home-buying process. These individuals have experience in real estate, are licensed agents, and are members of the National Association of Realtors, meaning they have more training and accreditation than real estate agents, who just have a real estate license in the states that they operate. A proper realtor will assist you in finding homes that fit your buying criteria, as well as guiding you through the sometimes complicated process of purchasing that home. From there they will help you to construct an offer and facilitate the purchase of your home. The main reason people use realtors is for their capability of finding homes, their experience in the home buying process, and their ability to secure more favorable terms.

How to Find a Realtor


There are several different avenues to take when looking for the right realtor for a Montgomery County first time home buyer. The most commonly used method is to ask friends and family for recommendations, preferably for someone who they have recently used. These referrals are based on the experience that the friend or family member has recently had, making it a good gauge for how your experience with that particular realtor will go. It is very important to secure a realtor who is familiar with the area that you are trying to purchase in. You can also attend local open houses to network with the realtor that’s present. Keeping an eye out for realtor signs in your area can also broaden your selection. Finally, if you are unable to source a realtor using these methods, you can call your neighborhood realtors. Be sure to shop around and compare realtors by asking several key questions.

Questions to Ask Your Realtor

There are different types of realtors that specialize in buying and selling. Along with making sure that your realtor represents you, the buyer, there are other important questions that you are going to want to ask to make sure that a certain realtor will guide the purchase in your favor. Besides finding out what services and type of representation the realtor provides, inquire about how much experience they have in your area. This is a good indicator that the realtor has a good understanding of how long homes typically stay on the market and other economic trends relative to your location. As a first time home buyer in Montgomery County, you are also going to want to ask questions specific to buying such as, what challenges you will face in today’s market. This will give you an idea of what the realtor knows about the local market and what difficulties you stand to face. Also, it is important to understand what the realtor will do to assist in making competitive offers and how they will negotiate with sellers. 

Tips for Buyers

Before deciding on a realtor, be sure to shop around and compare their experience, their buying approaches, and their ability to maintain communications. These are all crucial factors that go into the relationship you will have with your realtor and in turn, will affect your buying experience. They are your representation and will influence the seller and their agents. Make sure that you feel comfortable with your realtor and reassure yourself that this is someone that you want facilitating a major purchase. The rate that the realtor charges should be around 5-6% of the final sales price, anyone who charges significantly more than that should be avoided. Finally, you will want to look into the realtors’ previous clients and see if they were satisfied with their work. With the realtor being the one who creates an offer, see how other offers and purchases were conducted with previous clients and see how they differentiate from the listing price.  

Get the Best Rate as a Montgomery County First Time Home Buyer

By finding the right realtor as a Montgomery County first time home buyer, you set yourself up for a successful and advantageous home purchase. The right realtor will locate homes that fit your needs and wants in the area of your preference, formulate and facilitate competitive offers and ensure that you get a better deal than you would have without them. Once you have found a realtor who retains your best interest, you will need a mortgage broker that does the same. At Federal Hill Mortgage, you will be paired with team members who will guide you through every step of the home-buying process and secure great rates and terms on your mortgage plan. To find out the difference that Federal Hill Mortgage can have on your home-buying experience, call or contact us today!

First-Time Buyers Home Buying Advice

5 Tips for Choosing a Home That Will Appreciate in Value

When choosing a home to purchase, one of the most important things to consider is its potential to increase in value over time. Real estate can be a significantly profitable investment, but only if the property appreciates over the time of ownership. To assist in predicting this appreciation, there are several key factors that should be evaluated in order to determine if, and how much, the property could be worth down the road. While there are limitless factors that come into play that cannot be foreseen, there are a few that can aid immensely in determining the appreciation value that your property could potentially have. By considering these before purchase, you will be able to gain a better understanding of what your home will be worth down the road.

1. Location

By far the most important factor to consider when purchasing a home is the location where it is situated. While you can make endless renovations on a home’s physical structure, the value of the land it is built on is mostly out of your control. When looking for a home that will increase in value, look at the local neighborhoods, schools and developments. If the neighborhood is growing and the market value for nearby homes has steadily increased over the past few years, that is a solid indicator that the area as a whole will continue appreciating. Look for recent developments and construction projects. If a home is located in a place where investors are funding major infrastructure projects, then the demand for homes in that area will increase as more people will want to move there. Some red flags for a specific location include rising crime rates, underfunded educational institutions, and abandoned structures. All of these factors will deter higher-paying buyers and thus decrease the value of your home as these problems continue to grow.  

2. Fixer Upper

While there isn’t much you can do about an area besides being vigilant in your observations and predictions, there is a lot you can do to a home’s physical structure to increase its value. When purchasing a home that could use improvements, it’s important to be conscious of what upgrades will make your day-to-day life more comfortable and what will impact home value. If you have the resources or the knowledge necessary to make these improvements, you can get a home for a good deal and raise its value through renovations. The location should still be considered when buying a “fixer-upper”. Buying a home that needs repairs in an advantageous location means that you will get the home at a relatively good deal and, through renovations, increase the value of the property while the land it is built on also appreciates. A well-built home in a depreciating location will lose value while a home undergoing renovations in an appreciating location will see a significant increase in value. 

3. Potential Upgrades

When looking at homes to purchase, try to imagine what upgrades you could potentially add to the property to increase its value. Does the kitchen need remodeling or new appliances? Could the yard use a serious cleanup and some new landscaping? A wide variety of affordable upgrades can be done to a home that can greatly improve its value. Be considerate when making these upgrades as some will cost more than the value they will add.

4. Market & Current Rates

home in Aberdeen MD

While future market fluctuations are nearly impossible to predict, the current market and available rates should affect your decision on when to buy a home. Purchasing a home with a long-term loan at a high-interest rate does not leave as much room for appreciation as one purchased at a lower interest rate would due to the additional cost of interest. Buying a home while the market is low will greatly increase its chances of rising in value. When you buy your home is almost as important as where you buy your home. See if homes in your desired area are selling for, or more, than the asking price. If so, those homes are typically overpriced to match the high demand for real estate. Buying a home for more than it is actually worth is a surefire way to ensure that your home does not appreciate as much as buying a home that is undervalued.

5. Population Influx & Growing Job Market

home tour

When it comes to the impact of supply and demand, real estate is no exception. If an area shows a recent influx in population, or if an influx can be accurately predicted then it can be assumed that demand will rise. When demand rapidly rises, the supply of homes takes a while for it to catch up and in that time, the homes already there will increase in value. A major indicator of a population influx is a growing job market. A great recent example of this is the Washington D.C metro area. Demand for homes has significantly increased over the past decade due to a population influx. Due to this disparity in supply and demand, homes in the D.C metro have skyrocketed in value. 

Make the Most of Your Investment With a Great Mortgage Rate

Purchasing a home at a low rate that will increase in value over the duration of your ownership is one of the best things that one can do to ensure a financially successful future. To help ensure that you obtain a beneficial deal on your new home, have the professionals at Federal Hill Mortgage in your corner, assisting you every step of the way. Our team will use our decades of combined experience to make sure that you have every asset that you need to guide you into your new home. For the best mortgage brokers and lenders in Baltimore and the surrounding areas, look no further than Federal Hill Mortgage. Call or apply now to receive expert guidance throughout your home-buying experience. 

First-Time Buyers Home Buying Advice

Competitive Market Tips for First-Time Home Buyers In MD

Jumping into the real estate market for the first time can be a daunting task. Simply looking at the wide variety of available homes for sale shadows the process that goes into mortgaging a home. By making yourself aware of this process and carefully formulating a mortgage plan tailored to your unique situation, you stand to be advantaged among first-time home buyers in MD and will be able to better navigate the current competitive market. 

Review Your Financial Situation

Before hopping on the real estate websites and seeing what is available, you need to review your financial situation. Assess your debt such as credit cards and loans. Paying off your debt will grant you a better interest rate and reduce the potential risk for the lender. Checking your credit also allows you to gain an idea of where you stand financially and what types of loans you may qualify for. Once you have gathered all of your necessary financial information, you can properly access all of it to determine your budget for your mortgage and down payment. When considering your budget be sure to include property taxes, homeowners insurance, regular maintenance, and a fund for emergency repairs. 

Pre-Approval and Pre-Qualification

Gaining insight into what your home buying costs are going to be is extremely valuable to first-time home buyers in MD. Pre-Qualification allows you to find out how much you may qualify to borrow, what your spending budget is and what your monthly payment could end up being. The pre-qualification process will go over your debt-to-income ratio and your overall financial situation to understand your ability to pay back your mortgage loan. A majority of sellers will not consider an offer without pre-qualification. A pre-approval letter is from a lender which says how much of a mortgage you will qualify for. This will show the seller how much you will be able to offer on a home. A pre-approval works wonders in having a seller take you seriously as it shows your ability to make the purchase and adds a great deal to your appeal as a buyer. Both of these preliminary measures will greatly increase your chances of securing the home of your choice. 

Down Payment

The down payment is a major factor in determining your mortgage costs. Generally, the higher downpayment you can afford, the better. Lenders prefer higher down payments as it reduces the risk that they take when lending you money. As a rule of thumb, a 20% down payment will result in lower interest rates and a shorter loan term. If you cannot afford 20%, fear not. Down payment assistance programs and first-time home buyer programs exist to assist buyers with down payments. Be sure to explore all of your options with your mortgage lender to find a program that applies to your situation. 

Finding Your New Home

Once you have completed the preliminary steps previously mentioned, it is time to start searching for your new home. By understanding what you can afford and how much you qualified to get loaned, you can refine your choices and find homes that you can afford. First, you need to list your needs and wants. It is much more important for you to find a home that meets your needs rather than your wants. Next, find out what type of home you want. Single-family homes, duplexes, condominiums, and townhomes are available with varying specifications that should be selected based on your personal preference and budget. After the type of home is selected, pick a neighborhood that works for you and meets your criteria. Look for neighborhoods with good schools, low crime rates, low property taxes, and potential for growth and development. This is an important step as it will determine the future value of your home. When looking, be patient and don’t panic buy. Jumping the gun on a home purchase is a common mistake made by first-time home buyers in MD. The market is constantly fluctuating, meaning that the homes currently listed will be sold and replaced with newly listed homes every week.  

Making an Offer

Before making an offer, shop around with different mortgage lenders to secure the best rates available. Consider closing costs, points, and lenders’ fees and weigh them against each other to find a mortgage plan that works best for you. Once you have selected a lender and are sure about a home that you have found, you are ready to formulate an offer. The stronger the offer you make, the better chance you have of securing the home. Making a strong offer includes making a larger down payment and limiting contingencies. Making a larger down payment shows the seller that you are ready and able to make the purchase. Limiting contingencies such as insurance, financing approval, and home inspection clears the path for a sale and makes it easier and more attractive for the seller. By making the best offer possible you separate yourself as a serious buyer which is highly important in a competitive market.

Buying Strategies

While we have gone through how to properly prepare to make a first-time home purchase, there still exist several strategies that should be implemented in order to gain an edge in the current competitive market. First comes bidding. In 2021, over half of the homes listed sold for higher than the asking price. If you intend on purchasing the home that you are bidding on, remember that you are bidding against other buyers and not trying to secure a bargain. Next comes cash offers. If you can afford it, nothing beats the attractiveness of a cash offer. This appeals to the seller due to its relative simplicity and quick transaction speed. Letters of intent are away to ensure the seller that you are determined and committed to making the purchase as well as establishing a personal connection with the seller. Gaining a competitive edge over other buyers through these strategies is the best way for first-time home buyers in MD to secure the home that they aspire on living in.

Expert Brokers for First-Time Home Buyers in MD

The current competitive market has put a strain on first-time home buyers in MD, however, by following the aforementioned steps, you greatly increase your chances of securing the home you want for a price you can afford. Even with all of this beneficial information, having a professional mortgage team in your corner is the best thing you can do to increase your likelihood of success. Federal Hill Mortgage’s team of experts is ready to work with you from start to finish to find the perfect mortgage plan that fits your specific needs. Contact us today to get started!

Applying for a Loan First-Time Buyers Home Buying Advice

Understanding Debt-To-Income Ratio

When you apply for a loan, lenders will take a look at a variety of metrics to analyze your creditworthiness. From your credit score to your forclosure and bankruptcy history, various aspects are factored together to create a clear picture of your financial health. However, one of the most important is your debt-to-income ratio or DTI. If you’ve ever wondered what DTI is and how it affects your likelihood of getting a loan, you’ve come to the right place.

What Is Debt-To-Income Ratio?

DTI is a metric used by lenders to analyze your existing financial obligations, and how they weigh against your current income. Any form of debt or large ongoing payments you have may be factored in. For instance, a car loan, credit card debt, medical debt, student loans, or other property loans such as for an investment property will be looked at. Unpaid tax debt may also be factored in. These outgoing financial obligations are then weighed against your monthly income from all sources. DTI is valuable for lenders because it gives them an idea of the additional financial responsibilities you’d be capable of taking on.

What Does DTI Look Like in Practice?

To best understand how DTI works in practice, let’s take an example. Let’s say John’s bills breakdown like this: his car payment is $400, he also has student loan payments of $200, and his monthly credit card expenditures are $300. Lastly, his rent is $1,000 per month. John earns an income of $6,000 each month. If we add all of his expenditures and divide them by his income ($1,900 ÷ $6,000) we get a debt-to-income ratio of 0.31, or 31%.

What Is an Ideal Debt-to-Income Ratio?

Lenders have a DTI range that they’ll consider acceptable. Typically, a DTI of 43% is the maximum allowed to obtain a loan. Ideally, you want your DTI to fall below 36%. However, one caveat is that rent or mortgage payments are expected to account for no more than 28% of your total debt ratio. This consideration is to ensure that you have wiggle room to take on other debts that may arise.

How Can I Lower My DTI?

If you’re disappointed with your own DTI after calculating yours, it’s important to consider ways you can lower it. A lower DTI may help you secure more favorable rates as you’re seen as a more trustworthy borrower. One of the most obvious ways to lower your DTI is to focus on lowering your monthly payments. If your car is near being paid off, it might be best to do that before applying. Contact the billing departments of outstanding debtors to discuss methods of reducing monthly payments. You may be able to explore debt consolidation options as well, where you bundle high-interest debts into low monthly payments and pay several off at once.

Your DTI is a valuable metric to lenders big and small. Trying to balance your expenditures with income is crucial for your long-term financial planning. If you want an outstanding mortgage broker to help you work through the process, look no further than Federal Hill Mortgage. Apply today to get started.

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