For the first-time home buyer, it can get confusing to wade through the variety of loan options out there.
To ease the selection process, lenders have come out with the first-time home buyer loan. But before you decide to sign up for this loan, there are a few things you need to inform yourself about.
They are not tailor-made for ALL first-time home buyers.
Contrary to the name, a first-time home buyer loan might not cover all of your needs. You still have to take your specific needs into account before applying for one. To find out whether this type of loan is the right one for you, compare and contrast its offers to those of standard loan options. This is a very important step in making sure that you don’t have to deal with more requirements than you have to. Take note that first-time home buyer loans are created to lend a hand to prospective homeowners with low or moderate incomes. Because of that, there are income limits that must be met before you can get the loan approved. These limits are some of the stipulations that you will encounter in a first-time home buyer loan that aren’t present in more traditional loans.
Your house of choice might make or break you.
Just because you are a first-timer, it doesn’t mean that you automatically qualify for a first-time home buyer loan. There is a catch when it comes to selecting the home for the loan. Its value must meet a prescribed one, which is set by the lender, for your loan application to even get consideration. Homes with values well over what a low- or moderate-income family can afford are an automatic disqualification.
Certain benefits are exclusively designed for these loans.
Since they are not one of the more standard loans, first-time home buyer loans have benefits that you won’t see in other loan options. Benefits include lower down payment options, which let you pay less than 20% of the value of your home; deferred, or delayed, payments on the loan; limited lender fees; and subsidized interest. Not all the benefits will be given automatically though. Some benefits only come into play for low-income borrowers.
Owned a home before? You might still get approved.
Despite the name, you can still qualify for a first-time home buyer loan the second, third, or nth time around. The most important thing is that some additional requirements have to be met. The most notable is that you must not have owned a house in the past three or so years.
If you are an interested homebuyer, whether first time buyer or not, PrimeLending has various loan options to make sure your dreams of owning a home can come true. Make sure to contact PrimeLending’s top mortgage bankers today!