First Time Buyer PerksBad Credit & First Time Home Buyers
FHA loans and mortgages work perfectly for first time home buyers. There are four aspects to FHA loans that work for the first time buyer:
- The down payment is low. With a low down payment of just 3.5% of the purchase price, an FHA loan helps many purchases who don't have as much as 10% required by some institutions.
- FHA loan programs allow for bad credit and low credit scores than conventional loans. For first time home buyers, a low credit score is often the problem. Not just because their actual credit is bad, but often because they don't have much credit history to have built a high score.
- Rock bottom, low interest rates. A common misconception among first time home buyers - and those with bad credit - is an FHA loan has a high interest rate. NOPE! Nothing could be further from the truth. An FHA mortgage has the same low, competitive rates as conventional home loans.
- Low closing costs. The closing costs on an FHA home loan is often less than conventional bank loans. In an FHA program, the seller also often pays a portion (or ALL) of the closing costs for you.
Realtors LOVE First Time Home Buyers!
Realtors have the resources to be your advocate in the loan process. The biggest reason realtors like first time home buyers? Programs like FHA loans mean they have more opportunities to get you into a house. They're also paid by the seller, not the buyer, so they have every incentive to help you get through every aspect of the buying and closing process.