Dec 19 2009
VA Home Loans and FHA mortgages for first time buyers
When a first time home buyer chooses a Realtor and begins the search for their new dream home; most are hoping to keep as much of their savings to furnish or spruce up their home. There are a few mortgage programs with low down payment requirements, and scenario considerations as follows.
The best mortgage program available with no down payment requirement, is a VA home loan. Our hero Veterans may qualify for their first home without the need of any down payment. In fact, the seller can even contribute up to 4% towards the Veterans closing costs and prepaid interest, property taxes and homeowners insurance. With little or no out of pocket expense, Veterans can keep more of their savings and earn interest instead of paying interest.
Another practical first time home buyer program is the use of an FHA mortgage loan. FHA mortgages allow first time buyers to put as little as 3.5% towards a down payment. Keep in mind, HUD is considering changing the 3.5% to 5% soon – so get your Realtor and call your FL Mortgage Professional to secure a contract soon. Also, sellers can contribute up to 6% towards the buyers closing costs, prepaid interest, property taxes and homeowners insurance. At a loan-to-value of 96.5%, FHA has proven to be the most popular mortgage loan of first time home buyers.
Although there are more mortgage programs with little or no down payments; the VA home loan and FHA mortgage loan seem to serve first time buyers the best. For more information on these mortgage loans and more please contact your favorite FL Mortgage Professional.