Loan Options for First Time Home Buyers
- By Sam Khalil
- Published 10/7/2011
- Real Estate
- Unrated
Whether you are single, newly married or need a bigger living space for your family, first time home buyers have a great advantage right now in todays housing market. With mortgage rates at their lowest since WWII, now is the perfect time to do some research and make a plan to buy your first home. The housing market is overstocked with homes for sale offering a variety of choices in different price ranges.
First time home buyers have many loan options available to them. There are a lot of different programs offered for first time home buyers, but be aware of the selling tactics some companies may use to lure you in. There are three basic types of mortgages you may want to consider listed below. The different types of loans can be broken down into three categories; FHA, Conventional and VA loans.
FHA (Federal Housing Authority) loans may be less money down and come with higher interest rates , with higher fees attached to the closing costs. Go to your HUD (Housing and Urban Development) website for more information.
VA loans, available for veterans, those on active military duty, and spouses of the military, are slightly
easier to qualify for than conventional loans. Find out your eligibility before you apply for one of these loans. They may have a higher limit on maximum loan amounts, so make sure you research what the limits may be.
A conventional loan is most likely your best bet if you have a credit score of 720 or more. You will be able to lock in a fixed rate with a lower private mortgage insurance rate as well as some other savings on closing costs. The down side to a conventional mortgage is that they are not insured by the federal government. Jumbo conventional loans ($417,000.00) or above will have slightly higher interest rates.
Another option is a subsidized loan from a federal government agency such as Fannie Mae or Freddie Mac. These loans can help a first time home buyer find the right mortgage if they are looking at a lower price range home. These loans are designed to help people who have the most immediate housing needs find the right loan solution for their situation. There are also special terms and limits, so make sure you do your research.
When you are shopping for your first time home loan, stick to the basics and make a decision based on the facts and your budget and dont forget to apply for the home buyer tax credit.
First time home buyers have many loan options available to them. There are a lot of different programs offered for first time home buyers, but be aware of the selling tactics some companies may use to lure you in. There are three basic types of mortgages you may want to consider listed below. The different types of loans can be broken down into three categories; FHA, Conventional and VA loans.
FHA (Federal Housing Authority) loans may be less money down and come with higher interest rates , with higher fees attached to the closing costs. Go to your HUD (Housing and Urban Development) website for more information.
VA loans, available for veterans, those on active military duty, and spouses of the military, are slightly
A conventional loan is most likely your best bet if you have a credit score of 720 or more. You will be able to lock in a fixed rate with a lower private mortgage insurance rate as well as some other savings on closing costs. The down side to a conventional mortgage is that they are not insured by the federal government. Jumbo conventional loans ($417,000.00) or above will have slightly higher interest rates.
Another option is a subsidized loan from a federal government agency such as Fannie Mae or Freddie Mac. These loans can help a first time home buyer find the right mortgage if they are looking at a lower price range home. These loans are designed to help people who have the most immediate housing needs find the right loan solution for their situation. There are also special terms and limits, so make sure you do your research.
When you are shopping for your first time home loan, stick to the basics and make a decision based on the facts and your budget and dont forget to apply for the home buyer tax credit.
Sam Khalil
First Alliance Home Mortgage is New Jersey's premier Mortgage Banker/Broker. Their experienced Loan Officers provide clients with the latest information on special government programs, equity acceleration, and how to choose the type of loan that best suits their needs. http://www.fahmloans.com/
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