Buying a home for the first time can be exciting. Unfortunately, it can also be confusing and often a bit frightening, particularly if you are completely new to the home buying experience. One thing that you will need to think about is your financing options. If you are unsure of how you are going to finance your home, understanding basic options for first-time buyers is important.
If you have already found your home, you may want to check to see what financing is available for that particular home as well as your personal financial situation. Some companies that sell homes offer financing while others will point you in the right direction for financing through a third-party lender. If you are looking at Milestone Community Builders North Austin homes for sale for instance, they can provide you with information about the types of financing that may be available and what you need to do in order to begin the process.
Generally, you will have a few different options. Conventional loans are popular and these are normally gained through your local bank. You can speak to your bank to find out what their interest rates are and their requirements for providing a mortgage. If you prefer not to go the conventional loan route, there are other options as well, but some of these depend on a few different factors.
If you are a veteran or are currently in the military, a VA loan may be a good choice. These loans are guaranteed by the United States Department of Veterans Affairs. While the VA does not provide loans to home buyers, they do guarantee mortgages that are made by other lenders. You can speak with your bank to find out whether or not they offer VA guaranteed loans or go through a VA lender. The loans typically allow veterans and those currently in the military to purchase homes without a down payment and these loans are a bit easier to qualify for than a traditional conventional loan or many other government guaranteed loans.
The Federal Housing Administration or FHA also provides loan guarantees and in some cases, they will provide the loan depending on your financial situation and a few other factors. These are good loans for first-time buyers because they are a bit easier to obtain than a conventional loan. If you do not qualify for a VA loan, an FHA loan may be your best bet, particularly if you have less than stellar credit or any past credit issues. The FHA allows for down payments as low as just 3 percent of the home?s value so if you do not have a lot in savings for your down payment, an FHA loan may be a good choice.
Above all, you should understand that your credit score will have a major impact on whether or not you qualify for a home loan and the interest rate that you can expect to pay. A lower interest rate, which is awarded to those with higher credit scores, simply means that you will pay less for your home in the long run.
Source: http://www.acdproperty.com/financing-options-for-first-time-home-buyers.html
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