Purchasing a home is a great investment. Paying a mortgage instead of rent allows you to build equity and, if you ever decide to sell, profit from the property’s increase in value. But home buyers oftentimes need help paying for a house through a mortgage loan. Since first-time home buyers are not always well-versed in this process, finding a reliable mortgage-lending company to turn to is key because there are several programs that they can use—they just need to learn about them first.
A Few First-Time Home Buyer Programs to Consider
FHA (Federal Housing Administration) loans offer great options for first-time home buyers who may not have enough money to make a large down payment. Housing prices are expensive. Being able to pay a down payment that is 20 percent of the cost is not easy for some prospective buyers. This is why the FHA makes different loans available to house hunters so they can afford to purchase a home that suits their needs. With FHA financing, you could pay as low as 3.5 percent down.
But the problem is that not all lenders are FHA-approved mortgage lenders. Be sure to do your research so you receive the best advice from a lender that can provide you an FHA loan.
VA LoansVA loans only pertain to those in our armed forces who have served or are currently serving our country, as well as surviving spouses. Some VA loan benefits include no down payment options and no monthly mortgage insurance premiums. But VA loans are not just for first-time home buyers. Home owners looking to refinance their mortgage or renovate their home can also use this type of loan.
For first-time house hunters who have enough money for a large down payment and are interested in buying a luxury residential property—typically costing anywhere from $626,000 to $10 million, though it can vary depending on where you live—a jumbo mortgage might be the right loan for you. Some mortgage lenders do not approve many jumbo mortgages due to their high risk of default. To easily qualify for a jumbo mortgage, your credit score must be up to par and you must not have accrued too much debt.
The point is that, no matter what your resources are, there are additional programs available from reputable mortgage companies so first-time home buyers can make their dreams come true.