Ready to be a homeowner? Then these 3 Best Mortgage Loans for First-Time Home Buyers should help. Buying a home for the first time is one of the most exciting and confusing things you might do in your life. It is more than just the paperwork. There is new terminology to learn, fees to understand, and a number of people involved in the process. A major hurdle for first-time homebuyers is understanding the types of mortgages available to you.
Best Mortgage Loans for First-Time Home Buyers: FHA Loan
Many homebuyers in America view the FHA loan as the go-to option. This is especially true for individuals going through the home buying process for the first time. The FHA loan is also good for home buyers who have a less than stellar credit history.
The Federal Housing Administration makes it more likely that new homeowners will be approved for mortgages by guaranteeing the mortgage in the event of a default. The guarantee makes lenders willing to broaden the standards they use to decide who receives mortgages. Down payments for FHA loans can be as little as 3.5%. Homebuyers can choose loan terms from 15 to 30 years and this will play a large role in deciding monthly mortgage payments. First-time home buyers should calculate how much they can actually afford on monthly payments.
Best Mortgage Loans for First-Time Home Buyers: USDA Loan
Many new home buyers will be surprised to learn that the U.S. Department of Agriculture offers assistance to home buyers. You will not have to live on a farm, but the home you wish to purchase must be located in a rural area to take advantage of this loan.
The USDA loan allows home buyers to buy a home without a down payment and no need to pay closing costs. A stable income and a 640 credit score are required to be eligible for a USDA loan. Income requirements vary depending on which region of the country you call home.
Best Mortgage Loans for First-Time Home Buyers: VA Loan
Veterans, active-duty military personnel, and spouses can purchase homes with the help of the Department of Veteran Affairs. These loans are easy on home buyers and do not require a down payment or insurance on the mortgage.
To qualify as a veteran or active-duty military personnel, service members have to serve 181 days in times of peace or 91 days during times of war. Spouses are required to have been married to a service member who either died in the line of duty or was a disabled veteran who lost their life to an injury received while on active duty. Other requirements from the VA are minimal, but the lenders with whom the administration works may have their own requirements.
The process of buying a new home can be stressful for the new home buyer who does not do his or her homework. The three mortgage programs profiled above will not only help to demystify the home buying process, but can also result in a lower down payment, better interest rates, and lower monthly notes for new home buyers.
Not sure if you qualify for a mortgage loan? We recommend reading this article next.
Steelbridge Realty LLC is a Licensed Real Estate Brokerage that utilizes cutting-edge marketing techniques and data-driven Real Estate solutions in today’s ever-changing environment. Our group of professionals have decades of experience and have navigated through many business cycles. Our diverse background gives us the tools to guide people towards successful decisions.