The process of buying your first home can be exciting and complicated. There are many things you need to know. The mortgage is one of the most important but also the most confusing item on this list.
We covered the basics of a mortgage in one of our articles about first-time homeownership. In this article we will go deeper into the subject and offer some tips and tricks to help you get through the process.
What criteria must I meet to get a first mortgage?
To be approved for a mortgage, homeowners must meet certain requirements. According to Investopedia, certain lenders offer Special loans and benefits for first time homebuyers
Many people are surprised to learn that there is a general definition for what a “first-time homebuyer” is. To be approved for loans for first-time homebuyers, you must meet these terms. The U.S. Department of Housing and Urban Development (HUD) has established the criteria.
- Who hasn’t owned a primary residence for at least three years?
- An individual who is the sole owner of a residence that is not permanently attached to a foundation
- A single owner who has owned only with a spouse
- An individual who only owns a property that is not compliant with building codes
There are many loan programs that can help you purchase a home if you fall into any of these categories.
Additional requirements must be met before a mortgage can be approved
Other than the requirements above, you will need to prove your income for at least two years, a down payment of 3.5% and a credit score below 620. There are many programs that will allow first-time buyers purchase without requiring them to meet these requirements.
What are the best mortgage options?
There are many mortgage options. The most popular type of home loan is the 30-year fixed mortgage. This is a traditional bank private loan. There are many other loan options. Check out the top-rated types to find one that suits your needs.
1) Federal Housing Administration loans (FHA): Insured Mortgages that require 3.5% down FHA loans are more competitive than conventional loans because they have lower interest rates, smaller downpayments, and lower closing costs.
2) U.S. 2) U.S. Department of Agriculture loans: This loan program for homebuyers is aimed at rural homes and comes with fixed payments.
3) U.S. U.S. Department of Veterans Affairs loans (VA): These loans are available for military personnel with no down-payment, including veterans and active-duty military personnel.
4) First-time homebuyer programs in Many states offer local lenders that are more suitable for the borrower’s location than national lenders. NerdWallet offers a comprehensive guide to first-time buyer programs for each state.
5) Home Renovation Loan: This loan is for homeowners who are looking to purchase and remodel their home.
6) Fannie Mae loans and Freddie Mac loans: Created in Congress, Fannie Mae loans and Freddie Mac loan are the backbone of our housing finance system. They support conventional loans with only 3% down.
Find the perfect property!
There are many options for mortgages for first-time buyers. It is important to research your options and consider your needs before you choose the right mortgage.
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