Deciding whether to buy a home is a big decision. Many first-time homebuyers transition from renting to buying based home prices in a target area and current mortgage interest rates. Typically, the decision to purchase a home is based on several factors, such as you do not intend to move within the next few years. In addition, you want to have a stable income and secure employment.
First-time homebuyer loan options
30-Year Fixed-Rate Loan – This choice is the most popular but not always the best option for first-time homebuyers because of the down payment requirement. However, If you plan to stay in the home for the long term and have a substantial amount of money for a down payment, this option could work for you.
FHA Loans – FHA loans have a lower down payment requirement and less strict qualifying guidelines that work well for first-time homebuyers.
VA Loans – VA Loans are an excellent option for first-time homebuyers. This program allows service members, Veterans, and other eligible members to apply for a loan that requires no down payment. A VA loan has some additional requirements, but it is still a great option with lower interest rates.
USDA Loans – a great option for first-time homebuyers who live in rural and some suburban areas.
State and Local Down Payment Assistance programs – Many first time homebuyers struggle to save for a down payment while still having a stable income and secure employment. There are programs available to help deserving borrowers secure the funds for a down payment and assist with closing cost expenses in some cases.