If you are a first time home buyer, and you are thinking about buying your first home, you want to research the different loan options available to you. Just because you are a first time home buyer, that doesn't necessarily mean that a first time home buyer loan is your best option. There are several factors that you want to consider when applying for a loan as a first time home buyer. A lot of first time home buyer's don't have the money for a down payment on a loan. There are a few options with little to no down payment. There is your standard first time home buyer loan or FHA loan. The standard FHA loan requires a down payment of 3.5% of the purchase price of your new home. There is also a first time home buyer renovation loan or FHA 203k loan. You would still need to put down 3.5% of the loan amount. These loans aren't very common, and most lenders will have a 203k specialist that handles them. The Virginia Housing Development Authority, or VHDA, has a first time home buyer loan that is 100% financed, so it is a zero down payment loan. There are a couple of other zero down payment options for your first time home buyer home loan, but you don't need to be a first time home buyer. There is a VA loan or Veteran's Affairs loan, that's a zero down payment loan. You have to be a Veteran or active military to qualify for the loan. If you are buying your first home in a rural area, you may qualify for a USDA loan, or United States Department of Agriculture loan. The USDA loan also has zero down payment. A conventional loan is your standard loan, that normally requires 5% down payment. If you have reserve funds and are able to put 20% down that will take PMI, or private mortgage insurance, off of your payment. All of these loans may have different interest rates and qualifications, so you will want to check with your lender to see which loan best suits your needs. Here is a brief breakdown of each loan, but you will want to check with your lender to see what programs they provide.
FHA or First Time Home Buyer Loan -This loan is for first-time homebuyers. You put down 3.5% of the purchase price (this can be a gift). You will have to pay private mortgage insurance.
FHA or First Time Home Buyer Loan-- 203K-FHA's renovation loan, the buyer puts 3.5% down, and also finance repairs into the purchase. Repair costs are held in an escrow account and paid directly from the bank after closing. Repairs are normally completed in 30-45 days, but larger projects may take longer.
VHDA FHA Plus- This loan is for a first-time buyer, and allows 100% financing. The down payment amount is rolled into a second loan, this allows the buyer to purchase without putting any money down.
Homestyle Loan-Is a conventional renovation loan, this allows a homeowner or an investor to buy a home needing repair and add the cost of the repairs into the loan. The down payment based on the total of the purchase price and repairs.
USDA loan -This loan is used in "rural" areas, it allows 100% financing
VA loan - This loan allows Veterans to purchase a home with 100% financing. Buyers will need to provide proof of VA eligibility.
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