First Time Home Buyer Loans Should Not Send You to the Poor House

Tweet

 

Buying your first home should not send you into bankruptcy. Let's look at down payments and how first time home buyer loans stack up. First, understand that there really aren't any mortgage programs specifically geared toward first time home buyers. A few options end up helping you buy your first home because of their requirements. So let's look at those mortgage loan programs.

• FHA Loans - The standard FHA-backed mortgage you hear most about is the FHA 203b. The down payment requirement is 3.5% which means you'll need some cash to prove you have a little skin in the game. If a house is on the market for $80,000 then an FHA 203b will finance $78,000. You'll need $2,800 for a down payment plus cash-to-close.
• FHA 203k - The FHA 203k is one of the top home improvement loans that no one seems to know about. This FHA loan also comes with a 3.5% down payment requirement. But here's the bonus to the FHA 203k: you get to roll the cost of home improvements, repairs or renovations directly into the house payment. Want to add a deck? It's covered. Need to repair cracked walls or replace flooring? The 203k helps you finance that work right into the mortgage. This option lets a first time home buyer make a house their dream home.
• HomePath Mortgage - Fannie Mae-owned properties are basically houses owned by mortgage giant Fannie Mae. But Fannie Mae isn't interested in owning homes. So you have the chance to buy these homes with a 3% down payment and other benefits with HomePath Mortgage. Quite often these homes are priced below market value so you find great deals. And if it needs a little TLC, it may be eligible for HomePath Renovation.
• USDA Rural Development - This is the mortgage option that allows you to buy a home with no down payment. That's right - there's still a mortgage out there that finances 100% of a home purchase. The house must meet certain location requirements to be eligible for USDA Rural Development, but many areas are covered.

This short list shows you that first time home buyer loans shouldn't break your budget. With low interest rates right now, low home prices and low-to-no down payment requirements, buying your first house isn't as scary as you may think. It's definitely a buyer's market!

Download "The Essential Guide to Buying Your First Home" at the button below. The guide covers more information about down payments and cash-to-close, as well as other first time home buyer facts and figures. Get your copy today, and be sure to share with other first home buyers.