Are you a firstime buyer looking for home loans? If yes, then this article “Home Loans for First Time Buyers” is just what you need. We understand that first-time home buyers tend to have a lot of questions about the mortgage approval process and so on. Luckily for you, these are what we will be covering in this article.
Table of Contents
Home Loans for First Time Buyers
Home Loans for First Time Buyers has various types of loan based on the borrower type (first home buyer, construction loan, owner occupier, property investment, refinancing or interest only) and the interest rate type (variable rate, fixed rate, split rate).
A home loan is secured against your property. This means if you are unable to continue paying the loan, the lender may ultimately require you to sell the property to settle the debt.
Benefits of Home Loans for First Time Buyers
The following are the benefits of Home Loans for First Time Buyers.
- Loan forgiveness: The homeowners who have stayed in the home for a given period of time will have a portion of their debt cancelled.
- Grants: Some of the areas do offer cash to put towards the home related costs such as your down payment or closing costs.
- Deferred payments: Some loans won’t charge interest and won’t need to be repaid until the homeowner sells the home or pays off the mortgage.
- Down payment assistance: Some programs do allow the home buyers to put down a little down payment or no down payment at all.
- Assistance with closing fees: At times, some of the loans place a cap on how much is to be charged for a closing cost.
- Savings on Interest: Some of the organizations do offer to pay or subsidize interest or help borrowers to qualify for loans with lower interest rates.
Above are a few different ways to you could benefit when taking a Home Loan as a First Time Buyer.
How to Qualify for a Home Loan as a First Time Buyer
Mortgage lenders look at a variety of factors when considering loan applications. The income, credit scores, debt ratios and the down payment funds are some of the most important factors for first time buyers qualifying for a home loan.
To Qualify for a home loan as a first time buyer, meet;
- The credit score requirements.
- The basic income requirements.
- Debt-to-income ratios.
- Minimum down payment requirements and have your documents intact.
The above lists how to qualify for home loans as a first time buyer.
Loans Available for First Time Home Buyers
The following is a list of loans Available for First Time Home Buyers.
- 15 years fixed rate mortgage.
- VA loan.
- 30 years fixed rate mortgage.
- Conventional loan.
- Jumbo loan.
- FHA loan.
- Adjustable rate mortgage.
- USDA loan.
- I CAN mortgage.
- Interest only loan.
- Home improvement.
Questions to Ask Before Buying Your First Home
Before purchasing your first home there are some necessary questions you need to ask.
- Do I need to get pre-approved?
- How does my loan relate to my down payment?
- Do I need a credit report?
- How can I create a smart homeownership budget?
- Do I need a Real Estate Agent?
- What is a debt-to-income ratio?
These questions are absolutely necessary because you will be feeling anxious and a bit overwhelmed by the process. Also, it could be the biggest decision you will be making during your lifetime. Further research can be done on Google.