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RDS Real Estate Would Simply Like to Extend Some Helpful Info to the First Time Home Buyer…
The first home purchase is a monumental step in a person’s life, and is certainly one that needs to be calculated and planned. The two most important things for a first time home buyer are to be informed and to explore the options. The financial stressors are ultimately the most difficult facets to purchasing a new home but getting a home loan, and even a no money down home loan is easier than what some may think.
First time home buyer loans give financial assistance to qualified borrowers. They may do this in the following ways:
- Allow for a very low (or no) down payment
- Subsidize interest costs (they pay all or part of it)
- Offer grants
- Forgive loans
- Limit fees that lenders are allowed to charge
- Defer payments
Loan rates for first time home buyers are more affordable than what most people might assume.
What are FHA loans?
The Federal Housing Administration (FHA) runs several programs to promote home ownership. In most cases, FHA loans are mortgages obtained with the help of the FHA. With a small down payment, buyers can purchase a home. FHA loans make it easier for people to qualify for a mortgage, but they are not for everybody.
An FHA loan is a loan insured against default by the FHA. In other words, the FHA guarantees that a home lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make large mortgage loans.
Home Loans Countrywide
The process of receiving home loans countrywide vary state by state but all first timers who apply for a home loan need to be aware that there are some challenges that come with first time home buyer loans.
- Lower value home may not be the home you want
- You might lose some of the benefits of the program if you sell your home too soon
- You may have to pay recapture tax for some of the benefits you received
- You may be limited to a short list of loan types (only 30 year fixed rate mortgages for example)
- You may have to share increased home values with the program
Country wide home loans do make it possible for anyone in America to get the home of their dreams in the location they want.
Who Can Get a New Home Loan?
Only individuals who have never owned a home are candidates to receive a new home loan are eligible for a first time home buyer loans. You may have to meet certain income restrictions to qualify for first time home lending. In general, these programs try to limit benefits to people with low and moderate income levels.
The best thing to do for a first time home buyer is to explore all your options. Take a look at what your traditional mortgage lender is offering, and compare it to the subsidized first time home buyer loans. Look into FHA loans and the loan rates. Once you see how the numbers compare, consider the cost of flexibility.