Buying a home is not easy. There is a lot of paperwork, guidance, and people involved. But this is nothing in front of what we are going to remind you which is ‘financial limitations.’ It is not a matter of a couple of dollars and that’s why you might need a mortgage.
But there is a major issue that most of the first-time homebuyers face and that is selecting the right mortgage. There are many different types of mortgages and some of them are perfect for those who are buying their first house using home loans.
If you are the one going for the mortgage for the very first time, then this post is a must-read for you. We are going to tell you 6 types of loans and programs for first-time homebuyers. So let’s have a look
- Conventional loan: A loan which is not a part of any specific government program
- USDA loan: A loan that allows low-income borrowers to build their house in the rural area
- VA loan: A perfect program for people who are serving or have served in the military
- Jumbo loan: A loan for people who demand a mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddy Mac regulations
- FHA loans: A government-subsidized loan perfect for first-time home loan borrowers
- Reverse mortgage: A special type of loan that allows older people to convert the equity in their home into cash.
A conventional loan is not a part of any specific government program. It can be termed as a very basic type of mortgage which is very popular and can suit the need of almost everyone. This mortgage could either be fixed mortgages or adjustable-rate mortgages. This loan is not just for those who want to buy a new home, people looking for refinancing a mortgage can also go for this option. Talking about the credit requirement, in order to get the application of this mortgage approved, you should have a higher credit score as compared to other government-sponsored mortgage or FHA program. If you have an excellent credit history, then you might not face any issue in getting the approval.
USDA loans are suitable for those who want to own their house in rural area. This loan program is for non-farm house owners in rural areas. It is a part of a federal loan program. USDA loan can help those having low-income. If due to any reason, you fail to get a conventional loan, you can also go with USDA loan to buy a house in a rural area. The requirements to get this loan are not as strict as other mortgage programs. The income limits for getting this mortgage may differ depending on the location and the size of your household.
Credit score plays an important role when it comes to getting a mortgage. However, VA loan is a type of mortgage that welcomes those who are having less than perfect credit score. This is specifically for those who have served or are serving in the military. Family members of military personnel may also get approved for this loan. One of the things that makes it outstanding is that no down payment is required making it easy for people to build their dream house. The interest rate of VA loan is also lower as compared to other mortgage programs.
Everyone has a different dream house but for those dreaming of an expensive one, Jumbo loan would be a perfect fit. This loan is specifically for those wanting to get a loan that exceeds conforming loan limit set on mortgages eligible for purchase by Fannie Mae and Freddie Mac. Since this loan deals with a much higher amount, the process of getting approved can be a bit lengthy. There are a lot of things that need to be taken into consideration. Some of the most crucial documents that you would require are of
- Credit Score
In most part of the U.S., this loan can begin at $417,000 and in some nations having high home prices, the rate can go up to $625,500.
A first time homebuyer will always demand something reliable and convenient when it comes to selecting the mortgage and FHA loan can fulfil this requirement. It is a type of loan that doesn’t deal with any firm or strict qualification requirements and this is the reason it is attractive to most of the first time home buyers. FHA loan is not just for those who are buying their home for the first time, but people who have already purchased a house using a mortgage can rely on it.
Many senior citizens find it hard to make their living. Due to health complication and financial state, living a comfortable life could be a little tough for them to have a comfortable life. But reverse mortgage could be a strong financial support to them. It is a mortgage plan which allows the borrower to convert the equity in their home into cash. As far as the qualification of the loan is concerned, there are no income or credit score check is needed. The repayment of the loan can be done by either the borrower itself or its family member after the demise of the borrowers.
There are many different types of mortgages and some of them are perfect for those who are buying the house for the first time using a mortgage. We have mentioned a couple of best-fitted mortgages that will help you build your dream house without any financial limitations. If you are wondering who you should call to discuss your mortgage requirements for your dream house, then PierPoint Mortgage is right here for you. We are having some of the best and the finest mortgage specialists who will assist you in getting the right mortgage fulfilling your financial needs.