Buying a home is one of the most intimidating processes you may ever go through. The excitement you feel when initially pre approved, to the mix anxiety, anticipation, uncertainty and joy you receive when getting your accepted offer. This is all compounded when you’re doing it for the first time.
This is also why it’s important to do your homework up front and figure out what the best option for you is. There are a variety of loans that can cater to different financial profiles, some lending institutions offer multiple options, and some specialize in a single option.
As a first time home buyer you are eligible for incentives that include lower rates, no mortgage insurance and little-to-no down payment. It’s crucial you are aware of these options so you can make a good decision.
Let’s go through some of the better first time buying options:
My personal favorite because it offers competitive rates, and it doesn’t adjust your rate if your score is not perfect. It offers the same 30 year fixed rate, and eliminates mortgage insurance without harsh raises in the rate. This is one of the reasons it’s an excellent first time home buying program.
WHEDA also doesn’t require a down payment up front, you can take the 3% down payment a conventional loan requires, and FINANCE it over a 10 year period. So you pay it off over time VS, Having to come up with a significant down payment at close.
Another good conventional loan, it has limited adjustments for credit scores lower than 740. It’s a good alternative to WHEDA because it has LOWER mortgage insurance and good rates for a variety of credit scores.
We use FHA quite a bit, primarily because it has low rates for lower credit scores, low down payment (3.5%) and it allows people to qualify for more home because the debt to income ratios are more relaxed.
These are the 3 primary loans used for first time home buying, because they have low down payments (if any) and low mortgage insurance. Usually a process of elimination method is used to determine which option is best for you. Keep in mind that Home ready and WHEDA have high income limits, so your household income cannot exceed a certain threshold.
WHEDA just raised their income limits to $89,125 for a house hold of 3+, Homeready is still at 60% of the CMI (county median income)
IF you would like to know more, please contact me directly via email or text / call.