What is Available For New HomeBuyers?

If you have never purchased a home before, you will want to see what you can find in terms of first time homebuyer programs. When you begin the process of purchasing a home, familiarizing yourself with the procedure of home mortgage can be beneficial as well. To help you save a whole lot of time, money and energy, a first time home buyer will be able to gather a wealth of information simply by reading through some of the various websites that can be found online. Believe it or not, there are a whole lot of different programs that you can choose from that may give you a leg up with the buying process.

Beautiful House by ArthurGouveia, on Flickr
FHA loans are available through the Federal Housing Administration, which is an extension of the government that works to aid homebuyers through mortgage insurance that will cover lenders. In addition to that, they help to provide loans that actually require a much smaller down payment. Generally, FHA loans will only require about 3% down, which is quite a bit easier for a first time homebuyer to be able to save when buying a home. To qualify for these programs, you will have to have a decent credit history along with a good amount of income that will be able to cover your monthly costs for housing.

As you look around for what is available to you in terms of first time homebuyer programs, you will probably see quite a bit mentions about private mortgage insurance. Private mortgage insurance, or PMI, might be required if you are going to be applying for a mortgage that offers a lower down payment. This is put into place to help protect the lender should you ever default on your loan. Generally, this insurance will come into play if you have a down payment that is lower than 20%. Depending on your lender, you may be able to cancel this insurance once you have worked to pay down your mortgage to where you have at least 20% equity in your home.

If you are still stuck and wondering what to do about securing a decent loan, there are actually a lot of lenders that will offer up conventional loan products. These programs generally offer up the low down payment that you require and could even give you the option of what is called a piggyback loan or second trust. A second loan, this closes simultaneously with your first mortgage. The overall goal is to help combine your down payment with this loan to help you reach the 20% needed with a conventional mortgage.

Even though the process of buying a house for the first time can be intimidating to some, it is easier than ever if you have access to some of the incredible programs that are out there. Once you feel as though you are ready to dive into home ownership, it will be important that you research all of the options that are available to you.