First Time Homebuyer Financing Options

Hi There, my name is Tanya Rodriguez with Benchmark Realty's International Real Estate Advisers. If you're a first-time homebuyer and don't know where to start the first thing you must do is call a mortgage loan officer. It's always best to check with the bank that you currently do business with first then shop around to see who is going to give you the best rate, terms, and lowest financing rates and fees. Be sure that you do this within a one-month period, prior to buying, so that you don't bring down your credit score. There are several different financing options depending on your credit score and financial situation.

1. FHA Mortgage is a federally backed mortgage. This type of loan is usually amortized with a 30, 20, or 15 years fixed loan and all you need is 3.5% of the purchase price for a downpayment to buy a home. You must also have a credit score above 620 in most cases. Many of these terms are subject to change depending on the finance company and legislation.  

2. If you are a Tennesse resident there is a THDA first-time home-buyer program. You must take a home buyers education class to be able to qualify for the Great Start downpayment assistance program. The assistance is in the form of a second mortgage that has the same interest rate as the first mortgage. If you purchase a home under 150k they will provide you a loan of $6000.00 for the downpayment and if the home purchase is above 150k they will provide you with a second mortgage downpayment assistance of $7500.00. Your credit score must be 640 and THDA Also has income limits of between 66,800-115,200 depending on the county and size of your household. The purchase price limits vary throughout the state but range between 250k-375k and are subject to change. This is a fixed-rate mortgage.

3. Bank of America currently has a couple of grants that will help you with 3% of your down payment to a max of 10k you must take a home buyer's education class for the down payment assistance. They also have a grant for closing costs up to $7,500 that does not require home buyers education class. These grants are for owner-occupied buyers but you do not have to be a first-time homebuyer. They are only approved for certain counties of your state and have income limits based on your county and the size of your household. You must have a credit score of 640. Please talk to a Bank of America Loan officer near you for more details.

4. VA Loans -  You must have VA Benefits and be honorably discharged if not still active. You must have a 600 credit score to be approved.

5.Conventional Loans are non-conforming loans and are not backed by the government but insured by private entities such as Fannie Mae and Freddie Mac. They have several different conventional loans depending on your credit score and debt to income ratios. First, they have a 3% down option your credit score must be 680 the second option is a conventional 5% loan you must have a credit score of 640. If your credit score is at 620 you will be required to pay 20% down.

I hope this information was helpful if so please like it and share it with others that are thinking about buying a home. Also, subscribe to our channel for more useful real estate information. Have a great day.