First home buyer loans are loans given specifically to those people who have never owned a home before; this also includes people like single parents and the displaced homemakers who just owned a home with their previous spouses.
Types of homebuyer loans
Taking time to research on your dream home financing can save you both the time and money, you can also inquire with California Home Loan Center to get all the information that you might require. It is important that you check your financial status to ensure that you get the property that does really suit your needs and wants.
Government home loans: the government does not directly offer the loan if it happens that the borrower defaults on loan, the government insures it. This is beneficial for lenders since it makes the mortgage loan to be less risky hence they can lower the requirements of their loan.
Conforming loans: They are also known as conventional loans, conventional loans are fixed-rate mortgages, and the federal government does not insure them. Conforming loans act in accordance with the guidelines like loan limits set by the government.
Non-conforming loans: This loan is one that goes above the limits of conforming loan.
Fixed rate loan: This does prescribe one interest rate and a monthly payment for the entire life of that loan, its life is always 15 or 30 years.
First homebuyer loans and grants
U.S. Department of Agriculture loans: This is a loan program that is specifically for homebuyers from low to the moderate income, they should be those residing in the rural areas of that country. This is a perfect loan for first home buyers because there is no down payment required.
The good neighbor next door: This is a program that gives housing help for firefighters, the emergency medical technicians, the law enforcement officers, and teachers. With this program, those listed above are able to get a discount of 50% of the home’s price.
Local grants and programs: Despite the fact that several cities provide grants to their first time home buyers, they also have their federal government coming up with various programs for that purpose. It is advisable that you check your state’s website on housing grants that are available in that area.
Federal Housing Administration loans: This is a loan that is very easy to qualify for compared to a conventional loan, it is the best load for a first home buyer because it has a lower upfront cost, and one can also make a down payment of at least 3.5%.
Veterans Affair loans: They do not make loans but often guarantee the mortgages made by those qualified lenders. It does not require a down payment and does not require mortgage insurance; this loan is also easier to qualify for than the conventional loans.
Jumbo loan: This loan exceeds the conforming loan, it poses a high risk to you as the lender, as a borrower, you will need to have excellent credit, you will also have to make a larger down payment, their interest rate is also higher.
How to qualify for First homebuyer loans and grants
It should be the borrowers the first time to buy a home.
The borrower has to be located in the city that he or she wants to buy a home from, that place has to be his or her primary residence.
He or she has to take a homebuyer education course that is approved in that area and should also be able to acquire a certificate of completion.
The property has to be 5 hectares or less.
He or she should have a 640 as his minimum credit score.
He or she should also not exceed the income limitations of that sate.