Purchasing a home for the first time can be a daunting task, and you may be uncertain on how to best finance the endeavor. Fortunately, many programs can make your dream of owning a home a reality. There are several incentives. And if your credit score is below average, there is no need to worry. You may still qualify for first-timer programs. Here’s more about them.
They are covered by the FHA. They are particularly targeted at low to medium-income individuals. You can be eligible for them if you have a fairly decent credit score. However, with a score of 500-579, you can still get a loan but at a higher down payment rate. And as long as two years have elapsed since you suffered bankruptcy, you can be eligible for this loan. These loans are especially ideal for people who can’t access credit elsewhere because of austere requirements.
Are you a low-income borrower looking to purchase a home in a rural area? Then consider applying for a USDA loan. These loans offer fairly comprehensive financing and low to zero down payments.
Veterans Administration (VA) Loans
These loans are aimed at veterans, service members, and eligible surviving spouses of military members.
They offer 100% financing, and they don’t require private mortgage coverage. To qualify for a VA loan, you’ll incur a VA funding charge that typically ranges between 1.25% to 2.24%.
If you’re a first-time homebuyer eligible for this loan type, it’s an excellent deal because you won’t need to pay a down payment or pay for insurance. Moreover, if you’re finding difficulty making mortgage payments, the VA can intervene on your behalf.
Good Neighbor Next Door (GNND) Program
Public servants do a lot of selfless work in communities. To enable these individuals to purchase homes, they can receive a reduced rate of up to half the price of the property
To qualify for the program, first, you need to be pre-approved. And if approved, an agent will be assigned to you to help you find properties available in your state. The agent will work towards helping you get a property at a great deal and handle all the paperwork for you. But you can also check available listings using the program’s website.
However, before you apply for the program, there is a caveat: you must consent to reside in the home you’ve identified for at least thirty-six months. If you’re not ready for this kind of commitment, the program may be unsuitable for you. However, if you don’t mind the terms, it’s a great program because there are low down payments and no application fees.
Fannie Mae or Freddie Mac
If you have a fairly solid credit score, a stable job but lack funds for a down payment, consider this program. Its down payment can be as low as 3%. It’s a great mortgage option if you’re planning to reside on the property for a long period. Why? You can rescind the mortgage if your home equity gets to the 20 percent threshold.
Energy-Efficient Mortgage (EEM)
Sustainable homes are the future. However, making tweaks or sweeping changes to make your home energy-efficient can come at a considerable cost.
Fortunately, you can get an EEM loan. Backed by the FHA or VA programs, EEM can enable you to make your home more energy-efficient. Whether you need to install a new, more efficient HVAC system, install heat pumps, or install a solar water heater, an EEM can facilitate this and bring down your utility costs.
Home Renovation Loan
Finally, you may want to renovate a home. But renovations can be costly, and you may be unable to pay for them out of pocket. Thankfully, you can apply for a home renovation loan to get the home repaired. Guaranteed by Fannie Mae, with this loan, you will get funds of up to $5,000 to cover renovation costs and funds for the initial mortgage.
These are just some of the programs you may want to explore. However, buying a home is a significant investment. Before you embark on it, you should seek financial advice. And if you’re uncertain which program is ideal for you, you may want to speak to a Mortgage loan officer to help you settle on the best option.