How to Find Home Loans for First Time Buyers
If you are looking for home loans for first-time home buyers, you should know that they are intended for individuals who havenít owned their personal residence for the past three or more years. Now, they want to purchase their own home. Such people can often take advantage of private or federal loan programs with special conditions not available to the other home buyers. Finding home loans for first-time buyers, however, is not a piece of cake. Here are a few tips to consider, which will help you achieve the American dream of owning a shelter under your head.
1. Calculate and write down all of your important financial data for the past couple of years Ė monthly and yearly salary, additional sources of income, monthly household expenses, loan payments and insurance installments, etc. Collect as many financial documents as you can find, such as pay slips, copies of tax returns, and the like. You will need this information during your search for home loans for first-time buyers.
2. Check your credit score for errors. This you can do at the website of the Annual Credit Report. If you detect any detrimental mistakes, notify the respective authority to correct them. As the loan interest rate you will get is determined chiefly by your credit score, it is important that you start shopping around for a mortgage with the highest score possible.
3. Select a mortgage broker to find the best deals for home loans for first-time buyers. You can ask your real estate agent to recommend a mortgage broker to you or, if you donít know any real estate agents, you can choose a broker yourself Ė search out the brokers operating in your area and visit their websites to acquaint yourself with their services and commission rates. Look for testimonials of their clients or ask the brokers themselves to provide you with references. Selecting a good and experienced professional to work for you can save you much money on the overall home loan cost.
4. One of the best options for home loans for first-time buyers are the loans provided by the Federal Housing Administration. This body also offers mortgage insurances on loans extended by FHA-approved creditors in the US. You can apply for an FHA loan either alone or with the help of your mortgage broker. To make sure your application is successful, you should be able to prove a steady income for the past two years and have a good credit record (i.e. not more than one 30-day past due remark) for the same period. To receive an FHA loan, you should maintain a low level of personal indebtedness and have a credit score of at least 580. In addition, you should be able to make a 3-per cent down payment after your application has been approved.
5. Carefully research any application restrictions that may apply in your case. For example, if you want to purchase your home jointly with your spouse, you will not be able to apply for a first-time buyer loan unless both of you qualify as first-time buyers. Also, if you have recently declared bankruptcy, you must wait for at least two years before you can become eligible for some of the available first-time buyer loans, including those provided by the Federal Housing Administration.