Today we wanted to touch base on the THREE loan types every first-time home buyer should know and a little bit about them.
FHA loans are great tools for first-time home buyers. Credit scores can be lower than for conventional loans. You can have the seller contribute to your closing costs – up to 6% of the purchase price! AND you can do 3.5% down OR as little as ZERO down with down payment assistance.
If you have good job history, decent credit, but don’t have cash saved up to buy a house, don’t fret. Ask your lender about an FHA loan. It’s entirely possible you purchase a home without having to use any of your own funds. Talk about first-time home buyer friendly!
Much like FHA loans, USDA loans are ZERO down and have a max of 6% of the purchase price from the seller to help with your closing costs. The USDA Rural loan program is a great one for our area. Credit scores can be lower than conventional, and many first-time home buyers take advantage of this program.
Most people think you need upwards of 20% down to buy a home. They’re usually referring to conventional loans. But here’s the deal: you can actually get as low as ZERO % down for a conventional loan – definitely 3% down. You just need good job history – at least two years – and great credit.
If you have both of those things, go for a conventional loan. It doesn’t have the fees associated with it like FHA and USDA – AND the interest rate is often lower!
There are several first-time home buyer loan programs available. Even if you don’t have the cash, the opportunity is there to buy a home.
Alright, friends. That’s it for now!
Grays Harbor Real Estate Made Simple.7