Many people, millennials especially, live in rented homes and apartments because they are quick to assume that their moderate to low incomes and current financial situations stand in the way of them becoming homeowners.
If you’re one of the millions of people who are aspiring for a home yet wary of the chances of getting qualified, then you’d be glad to know that if you ask and look hard enough, there are plenty of first-time home buyer programs that can accommodate and assist you in getting a place you can call your own.
FHA loans are known for having more lenient qualification requirements since the government backs them up. The Federal Housing Administration insures these loans, which allows minimal risk on the part of the lenders in the unfortunate case of borrowers defaulting on the payments.
This type of mortgage loan only entails a down payment of 3.5% of the total purchase price for people with a credit score of 580 or more. FHA loan lenders also consider applicants with a credit standing of at least 500.
These are loans guaranteed by the U.S Department of Veterans Affairs for military members on active duty, veterans, and their surviving spouses.
VA loans come with competitive interest rates and require no down payment or private mortgage insurance. There is also a no-minimum credit score requirement, which makes it a very good choice for those who qualify.
Fannie Mae or Freddie Mac
Programs that are backed by Fannie Mae or Freddie Mac work with local mortgage lenders to benefit low and moderate-income families. With the aide, mortgage companies are able to offer home loans that only require 3% of the purchase price as down payment.
Good Neighbor Next Door
The Good Neighbor Next-door program aims to help provide housing for law enforcement officers, firefighters, and other personnel who offer service to the community by granting them a 50% discount on the listed price of properties located in revitalization areas.
This lesser-known type of assistance program provides guaranteed loans for homes situated in rural areas. Because it is backed up by the U.S Department of Agriculture, a down payment is not necessary. A credit score of 640 is required to qualify, although those with lower credit rating are still allowed to apply. USDA loans, however, have income limitations that may differ depending on the state or region.
A word to the wise, though: before rushing in and grabbing the opportunity of buying a home, assess your financial situation thoroughly first. Just because you are ready for a mortgage doesn’t mean you are well-equipped to take on the financial challenge of covering all the other costs that come with it. There are still tax and property insurance payments to be made, monthly electric and water bills, and home maintenance expenses that need to be taken into account. Don’t wipe your savings clean just to afford that down payment. Make sure that you have enough left for the rainy days.
Also, do not make the costly mistake of trying to do it alone. Employ the help of a reputable real estate agent who can offer you an unbiased perspective and a sound advise. A trustworthy agent can help you through the bumps and hurdles of real estate and mortgage negotiations that may be unfamiliar to a home-buying newbie like yourself. You deserve to be guided by someone who’s already familiar with the possible hitches and who knows how to take proactive measures in order to avoid those complications.