Having the desire to buy a home for the first time? The government has made certain loan schemes available for people like you so that you can have your home even if you are not having the total resources. Most of the first time home buyer loan is given out at low down payments. The most common loan schemes are as follows:
Federal Housing Administration
This is commonly known as FHA. For people to acquire an FHA loan a minimum score of credit is required. They generally have a higher debt ratio than the other loan types. The Americans need to have a monthly mortgage for insurance and this is compulsory. The minimum amount that the borrower can pay as down payment is 3.5 percentage of the loan amount. The out of pocket settlement costs are quite less because the closing costs are added into the mortgage.
The department of veteran affairs in the US offers loans to the surviving spouses, veterans and the service members to buy homes for themselves. Mostly the loans are available to the active military personnel and the qualified veterans. If the loan amount is less than $417000, then there no need for down payments with these loans. Alternatively, no mortgage insurance is also required for the loans. The credit score requirements with these kinds of loans are generally low.
These loans are best for the borrowers who have good credit scores. These people might have enough assets and are capable of paying 5% of the loan as down payment. Under these loan scheme if a borrower pays 20% down payment then they can avoid the monthly mortgage insurances.
This one is another type of loan. It will be surprising for you to know that the Department of Agriculture in the US has a special program for the assistance of the home buyers. The program is generally available in the rural areas. They offer 100% finance by offering the mortgage guarantee to the lenders. There may be income restrictions, but that might vary region to region.
What Do You Need To Do To Get The Loan?
To acquire first time home buyer loan you should check your credit score first. If the score is an optimal one you should determine the debt and income ratio. This will enable the lender to identify the capability of the borrower to repay the loans. Another thing that the lender might want to see from you is your employment history and the assets you have under your possession. This will prove to the lender that the borrower has a consistent income and would be able to repay the loan amounts. In the case of delay in the payments, the lender can raise the funds from the assets.
So, if you are one that is having a lower income but have the desire to build your own house, you can take a loan under these government policies. Thus, the burden of loan rates will be less, and the interests will be low. So, repayment will become easier for you.