Home Loans for First Time Buyers – Types of Loans Available
Home loans for first time buyers are usually not difficult to find, since first time home buyers are a huge part of the housing market today. However, many new buyers aren’t aware of the options available to them and the difference between the types of financing available. Doing your research and learning about the various programs and choices available can help you to save you a lot of time and money. Here is a closer look at some of the types of loans available to you so you can make an informed decision when purchasing your first home.
One of the most popular programs for new home buyers happens to be FHA loans. These loans offer low down payments and the credit score requirements are minimal as well. Usually fixed rates are offered on these types of loans. Your monthly payments will be calculated including the insurance and property taxes so purchasing a home is more easily affordable for you. Just remember that these loans do have specific requirements, not only for the home buyer, but on the home being purchased too.
FHA HUD Loans
If you are considering the purchase of a FHA foreclosure home, you may be able to get FHA HUD loans to help out. This is a program that offers down payments that may only be $100 or so and closing cost assistance is also offered. If homes require repairs, they often include repair escrow in small amounts to help out as well. Taxes and insurance are figured into your monthly payments on this fixed rate mortgage as well. Terms may vary between 10 years to 30 years.
VA Loans
For active military or those who have been discharged honorably, VA loans may be another of the options to consider. This type of a loan doesn’t require a down payment and the interest rates on thee loans are usually lower than the market interest rates as well. At closing, there is a 1% funding fee that has to be paid on this type of a loan.
Conventional Home Loans For First Time Buyers
Of course, there are conventional home loans for first time buyers as well. While these loans are not targeted specifically to those purchasing a home for the first time, those with a high credit score can definitely benefit from going this route. However, down payments on these homes will usually be between 5-20% of the purchase price for the home. Over time though, you can save money because of the ability to get low interest rates if you have great credit.
When you’re purchasing a home for the first time, you do have many options. Specific home loans for first time buyers can help you purchase a home that you may not be able to get otherwise. Just remember, other loan options are available and you should take a look at all the options available before making a final choice.