If you're planning on buying your first home soon, you're probably filled with questions, concerns, stress, and plenty of excitement. Before you head off on the hunt for your dream home, you'll probably want to spend some time making sure you're able to get the kind of financing you need. After all, most of us don't have that much money laying around – we need to take out a mortgage loan in order to buy our home. Luckily, as a first time home buyer you'll have access to a few different options in terms of loans and in terms of assistance in getting your down payment together.
First time home buyers will be able to apply for several loans that are set up specifically for them. Not only do many lenders offer rates and loans that are designed for the first time home buyer, but there are also several government backed loans for those who have never bought a home before.
Look at local, state, and government loans. In particular, pay attention to the VA loans if you're a vet or the FHA loans if you're not a veteran. Both of these loans have helped tens of thousands of home buyers purchase their first home and offer decent rates.
That's one of the key things you need to pay careful attention to – rates. First time home financing can be very competitive, but you need to take the time to carefully review all of the terms and conditions in order to ensure you know what kind of interest rate and payment terms you have in place. Don't rush through things – be sure to read and review everything to protect yourself while still giving yourself the financing you need.
There are a few different things that come into play when applying for first time home financing. Just like any loan, you have to be approved, and the following points will have an impact:
Having a solid job history and a decent debt to income ratio will be the two biggest factors. Your credit history won't make it impossible to get financing, but it could impact your interest rate and other terms. Those with smaller incomes may qualify for loans that others wouldn't be able to get, as well.
Down payment is another big factor, and having money to put down on the purchase of the home will help you reduce rates and payments as well as help you qualify for some financing options. As such, you'll want to consider applying for down payment assistance for first time home buyers in the form of grants.
There are several grants offered by the government and by local and state non-profit organizations. Qualification requirements for these grants vary, but you should take the time to look into them since they could help you get additional assistance and take you one more step closer to getting the financing you need for your dream home. As a first time home buyer you have plenty of options out there for assistance, so be sure to consider them all.
When you are shopping for a home, you'll have plenty of things to consider. While most will need to pay attention to things like what home is right for them, where they are interested in buying a home, and so on, there are variables related to your loan that have to be considered as well. One of the biggest obstacles for many who are applying for a loan is raising the down payment funds needed to secure approval.
Traditional loans require that 20% of the purchase price of the home be provide as down payment. However, there are various other loans that are out there with much smaller down payment requirements. In some instances, down payment amounts can be as low as 3% if you take out an FHA loan. These loan programs are designed to make it easier for home buyers to get the home loan needed to fulfill their dreams of home ownership.
But what many don't realize is that you can still get down payment assistance to help you cover that 3% in many instances. So how do you go about receiving this down payment assistance? The answer is that it varies widely and really depends on your current location, and this means that different qualifications exist for different potential home buyers.
The reason is simple – different states and local governments have different programs in place for down payment assistance. These assistance programs often offer grants to those who qualify, and are awarded without the need to repay the money. However, you'll have to meet various requirements. There are different factors at play here, but common requirements include things like the following.
In short, you'll need to begin the process by researching the various options that are available in your area.
Look into what each one offers to you and what kind of requirements you must meet in order to receive the assistance for down payments.
In terms of the FHA loan itself, that's a much easier aspect of the loan to qualify for. The FHA program does enable borrowers to receive down payment assistance and apply it towards the process of receiving an FHA loan. The key stipulation is simply that you are able to qualify within your state. If you can show that this is the case, securing your loan will be much easier. So on the surface FHA does not provide home loans with no down-payment, but they do allow the grant or DPA that equates to a zero down loan for applicants that meet their specific requirements.
Buying a home is a huge step, and one that offers tremendous rewards. The first step is simply making sure that you have the needed funds to come up with the down payment required, and for those in the process of finding their home, it's important to remember that you do have plenty of options available to you to help come up with those funds. Read the latest post from FTHF, 14 Reasons Why Buying a Home Is Better than Renting.
First Time Home Financing.com does not offer no interest loans, grants or down payment assistance for first time home buyers. FirstTimeHomeFinancing.com is a website that offers information about residential real estate financing and does not guarantee rates or pre-qualification directly or indirectly through representatives or agents. FirstTimeHomeFinancing.com provides a news and information service by offering editorial content related to the mortgage industry.
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