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Mortgage News - Three Types of Home Loans for First Time Home Buyers


First Time Home Buyers - Government Loan Programs Offer Great Way for First Time Home Buyers to Get Financing


September 11, 2009 — There are various loan programs available to the first-time home buyer. There are certain ones that can benefit the first time home buyer more than the others. Government loan programs are usually the best for down payment amounts and decent interest rates. These programs include the FHA, USDA, and VA home loans .

FHA Home Loan

An FHA home loan is usually the most popular type of loan program for the first time home purchaser. A down payment of 3.5% is required for this loan. This amount can also be given to you from a relative or loved one. You are allowed a higher ratio of debt to income with this type of loan. Many banks do not allow much debt to be on the credit report at all. This type of loan is a great choice for those who would like to make the switch from renting to buying.

A lower monthly mortgage payment is usually associated with this type of a home loan. This is due to the FHA charging the purchaser a specific monthly percentage for it and the remaining amount is then attached to the principal of the loan. This is known as MIP funding cost.

FHA home loans can be obtained through various mortgage lenders and financial institutions, but usually you will be better off getting this loan through a mortgage lender who specializes in this type of a home loan.

USDA Home Loan

A USDA home loan is another wonderful loan for first time home buyers. It the home you have located is rural zoned, you may be qualified for this type of home loan. This type of loan allows for 0% down payment and has a very good interest rate. There is a maximum level of income on this type of loan. The more children or dependents you have, the higher your income can be. For more information on this type of loan, contact a government loan specialist.

VA Home Loans

A VA home loan, also known as a military home loan have been a good way for the first time home buyer to get a loan. You must be in the military or have been in the military before in order to qualify for this loan. If you are currently in the military, you are eligible for this loan after 180 days of service. You must have a credit score of 620 or higher to be eligible.

A VA home loan allows for 0% down payment and very decent interest rates. A VA home loan also does not need private mortgage insurance. This helps to have a lower monthly payment.




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