Items First Time Home Buyers Need to Know: Part 1 – Available Mortgage Programs

When you are ready, Part 2 – Understanding the Payment, Part 3 – The Loan Process and Part 4 – Pre-qualify are out!

It is assumed in this country that any reasonably intelligent adult understands the basic points of a mortgage before purchasing a home. However, lots of people don’t know how to change the oil in a car they own. Likewise, millions of people own computers and have no idea how to fix some of the most common problems. Here is the first part in a series designed to teach first time home buyers required information before buying a home.

Available Mortgage Programs

1. Conventional – This is still one of the most common types of mortgage loans available. It usually requires excellent credit and a down payment of at least 3-5% of the purchase price. The conventional mortgage will usually offer the absolute best interest rate compared to other programs.
2. FHA Loans – Authorized by the Federal Housing Authority (FHA) these loans are one of the most preferred loans for new buyers. The loan only requires a down payment of 3.5% and the credit score requirements are less stringent. And, the down payment can be a gift from a relative or friend. FHA 203k loans are also available if the house you are looking at needs rehab work done.
3. VA Loans – The Veterans Administration sanctions lending to veterans of the military. The VA loan does not require any down payment and also has lenient credit qualifications.
4. USDA Rural Housing – A division of the United States Department of Agriculture (USDA) provides home lending for properties in rural areas. No down payment is required if the appraised value of the home is high enough. For properties with a sufficiently high enough value, the closing costs can be added to the loan balance as well.

These are the primary types of loans available to the first time home buyer. Although the rates will vary from one loan to the next they are usually extremely close to each other. In order to decide which loan is best for your situation, contact us to see if you qualify.

View additional first time home buyer information from our main site. Also, you may want to check out our detailed loan process page.

Contact us below or apply online to see if you qualify for a first time home buyer program including FHA, FHA 203k, VA and USDA loans!