Buying your first house can be exciting and fun. Still, it can also be expensive, making the process difficult to understand for some. Luckily, first-time home buyer mortgages can make things a little simpler. But first, you must look at what’s out there and how one of these first-time loans could help you.
First-time home buyer mortgages are generally FHA loans or Federal Housing Administration loans. They are designed to help those who don’t have the best credit, whether poor credit or a lack of credit. So they’re not only for first-time home buyers, though they used to be, they can be an excellent option for someone who’s just starting.
These loans allow for buying a home without as large of a down payment. Where many financial institutions may request 20% or more for a down payment, you can get a house with as little as 3.5% down with an FHA loan. That will make a big difference in the type of house you can afford and whether you can afford it.
However, if you’re looking to get one of these first-time home buyer mortgages, you’ll need to know the requirements. The first set of requirements is about you. You must be a U.S. citizen with a valid social security number to apply. In addition, you must have a steady history of employment and adequate income. You must also use the loan specifically for buying, building, or refinancing your primary residence. And finally, your debt total must be at most 43% of your total income.
First Time Home Buyer Mortgage Specifics
There are also specific property requirements to consider. The property must be your primary residence, and it can be a 1-4 unit residential home, townhouse, condominium, mobile or manufactured home, or modular home.
Why would you want this type of loan? Well, because qualifying is more accessible than a traditional mortgage. The lower down payment is excellent for those just getting started, and the competitive interest rates are a great way to save money and get the home you’re looking for. Add in the fact that these mortgages are assumable if the house is sold and that there are programs to decrease costs even further. You have an excellent option for first-time buyers.
LoanDepot is here for you if you’re looking at first-time home buyer mortgages. All you need to do is contact us to find out more about your options and get started looking for your first home. It could be yours before you know it.