What Is A First-Time Homebuyer Loan And How It Works?
As soon as people decide to buy their first home, they start thinking about finances. It is often a matter of concern for first-time home buyers. Managing a home budget with monthly expenses is a big task for most of them. Thanks to the flexible first-time home buyer loan options. It makes the dream of owning a home come true, quite effortlessly!
A first-time home buyer loan is for the people who are willing to buy their first home with limited or no savings. Generally, buyers with good credit scores and moderate-income get the loan benefits. The loan programs for first-time home buyers also differ from location to location. In case, this is not your first home, you can still apply for FTHB loans. A candidate must not own a home property for a certain years of span for the loan eligibility. These loans have features to ensure smooth payment. The top benefits of various FTHB loans includes:-
– Down payment
The FTHB loans are available to people at minimum or zero down payment. This is the biggest motivation behind choosing the FTHB loans.
– Interest Aid
Organizations often customize a lower interest loan plan for clients. They help to pay the due interest charges. It makes the monthly installment payment easier for new homebuyers.
– Loan forgiveness
Often, the borrower gets loan forgiveness. It can be cancellation of the complete amount or sum percentage from the mortgage debt. This generally happens after a long duration from the date of purchase.
– Fees Aid
This can help homebuyer by limiting the amount that lenders can charge to close a loan.
You can reap these benefits from FTHB loans. However, your program might offer a few or none of such benefits. It depends upon your geographical location and financial status. You will need to find the first-time homebuyer loan providers in your area. Make sure you ask about the pros of the chosen loan in advance.
Where to find a suitable loan option?
Now you know the FTHB loan programs are helpful. Yet, finding a good deal for you needs some research. You can go to the U.S. Department of Housing or similar websites to know about these loan providers. Also, try to search with your preferred home location to get the nearest suggestions. Generally, mortgage companies offers good FTHB loans. Do check them if you are a first-time homebuyer in MA.
Like every coin has two sides, these FTHB loans come with some drawbacks. It is a specialized loan category that is limited to affordable property. These loans do not give liberty to buy expensive homes. The main goal is to provide financial aid to the needy people. Another point, these plans only include primary residence. It is not meant for property investors. If you sell your home soon, you might lose pay recapture tax or other benefits. Also, you might need to share the home value gains with the lender.
The first-time homebuyer programs are beneficial. However, the limitations can make you think twice about it. If you have a good credit score and income, you can look for FHA, VA, USDA loans or other options. These loans have certain eligibility criteria. Also, they are not restricted to first-time homebuyers only.
You will get many options when you research it. Make sure you take advice from your financial planners. Drew Mortgage, one of the Massachusetts Mortgage Companies, is a comprehensive mortgage planners. We help you to find a suitable mortgage loan that supports your financial goals. Get ready to buy your dream home in the desired location soon.