First Time Buyers

A first time home buyer loan is commonly referred to as an FHA or Federal Housing Administration loan that is sponsored by the Department of Housing and Urban Development. First time home buyer loans are government guaranteed loans. This financing is not granted directly from the Federal Housing Administration, but by traditional lending institutions such as banks or credit unions, and sometimes mortgage brokers. A Mortgage broker may participate in the FHA program by offering this financing to their clients through a variety of approved lenders.

A mortgage broker acts as a third party intermediary between a borrower and different lenders to ensure the most beneficial financing is made available to the borrower. Most first time home buyer loans require a down payment. Conventional loans typically require a 10%-20% down payment for approval whereas these only require a 3% down payment. In addition to the low down payment, the borrower is allowed to wrap the closing costs into the mortgage. The closing costs on a first time home buyer loan are typically the responsibility of the buyer unless otherwise stated in the purchase agreement.

The financing usually has an average predetermined interest rate range, however, credit score can affect that range. Borrowers should monitor their credit report before applying for first time home buyer loans. By monitoring the report, a borrower can be certain that there are no inaccuracies affecting their score, which ultimately affects the interest rate. The borrower can also seek loan counseling prior to application and receive advice and methods for improving the credit score. These programs also inform the borrower of what to expect when owning their first home. Those that are not prepared will find that home ownership can be much work.

As much research as possible should be done before choosing a lender. It is recommended that borrowers check with their local BBB or Better Business Bureau chapter and seek out ratings and previous client reviews before making the first time home buyer loan lender selection. This can help provide the borrower with a sense of what to expect when beginning the application process. Financing for people with bad credit can be found through Internet searching and through a lenders referral base. Ideally a borrower for will want to have no debt at all. After all the Bible says "Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law." (Romans 13:8)

Add to: File Insurance Business article Teen Photo Images