Are you wondering what types of mortgage loans you qualify for through mortgage lenders as a first-time homebuyer? If so, then please continue reading. We want to explain the kinds of new loans homebuyers should look for first and why. The type of loan you get for your home can make a huge difference in terms of what payment you will have. Here is a breakdown of some of the most popular types of loans a first-time homebuyer may qualify for.
Types of Mortgage Loans:
As we go through this list, you will notice that each type of mortgage loan listed varies based on its criteria. Some require military experience, while others have specific requirements, such as credit scores. We can help you figure this information out if you are unsure where you fall. Just look through the loans to see if you think you are ready to get the process going.
Prior to getting a home loan, make sure you are also taking steps to get your finances in order. This means saving up money for your down-payment, repairing your credit if it needs a boost, and paying down as much of your debt as you can. These steps can help you be more likely to qualify for a mortgage before looking at properties to buy.
FHA Home Loans
FHA loans are the most common mortgage loans available to any first-time homebuyer with weaker credit scores. The program can go down to a credit score of 500 with a higher down-payment. If you want to pay less than 10% down, you need to have a credit score of no less than 580. That allows you to put only 3.5% down on your home.
VA Home Loans
Another type of mortgage option you have could be a VA loan. However, this is a loan that only current or former military members, or surviving military spouses, can qualify for. So long as your veteran status is in good standing, you can be eligible to buy a new home with no money down towards the house, and typically the loan comes with a lower than a traditional interest rate. This program gives veterans a little bit of a thank you from the government for their service.
USDA Home Loans
The USDA program for home loans is unique as well. Should the home you are buying be in a more disadvantaged area, such as a rural town or suburb, you may be able to get a USDA loan. The United States Department of Agriculture guarantees these loans, so traditional mortgage lenders know that someone will cover the loan should you wind up unable to pay for the property. If the property meets the conditions and meets the requirements, this property may require no money down and have lower payments than other loan options.
Adjustable-Rate Home Loans
Another option that can be suitable for some first-time homebuyers is called an adjustable-rate home loan. This is a loan where the interest rate varies and can change throughout the course of the loan. Your mortgage will usually have some form of a fixed rate for a set period at the beginning of the loan. Once that time is up, your interest rate will fluctuate depending on the market. That means your payment can go up or down depending on how the market is doing.
Fixed-Rate Home Loans
The alternative to the adjustable-rate home loan is the fixed-rate home loan. This is a simpler type of loan where your mortgage lender determines what interest rate it will charge for the full life of the loan. This is what you pay until the full mortgage is paid off. If the market goes up, you do not see an increase in a mortgage payment. However, if the market goes down, you also do not get a decrease in payment.
Rock Mortgage Can Help You Determine What Types of Mortgage Loans You Qualify For
When you are ready to start the process of getting your first home, reach out to us here at Rock Mortgage. We can go through the types of mortgage loans available to you and explain what makes them unique. Contact us now so you can get into your first home as soon as possible.
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