This depends on several factors such as:
A Synopsis Of Every First Time Home Buyer Program Available
- Middle Credit Score of 620 is required
- Loan program can be used virtually anywhere
- Relaxed property condition appraisal standards
- Minimum down payment required: 5%
- If gift funds are being used, 5% of the down payment funds must be the primary borrower’s own funds meaning the other 15% down can be gifted.
- Mortgage Insurance on this program applies if putting less than 20% down
- No monthly mortgage insurance
- No appraisal is required on this transaction (the purchase contract determines the value)
- Home Path offers an automatic 3% credit for borrowers closing costs
- Minimum credit score is 640. Program costs tend to be on the high side due to no mortgage insurance or appraisal required. As the credit score improves, the loan costs drop.
- Minimum down payment required of 3.5% of the purchase price
- Seller credits for closing costs up to 6% of the purchase price
- Entire down payment can come in the form of a gift (rules were recently changed; Down Payment Assistance is no longer available.)
- Co-signors are permitted on this program including non-occupant co-borrowers. (For example mom and dad co-sign for their daughter to help her purchase her first home even though they don’t occupy the home.)
- Credit challenges are permitted. This program allows for expanded loan qualifying with less restrictive credit guidelines.
- FHA 203K program allows for financing costs to repair a distressed property
- Must have California certificate of eligibility from the Department of Veterans Affairs
- 100% financing is permitted (no down payment required)
- Property must clear a full test report
- Seller credits permitted for up to 6% of the purchase price to cover closing costs
- Zero down payment is required
- Zero earnest money is required. If earnest money is used in the transaction it will be refunded to you at the close of escrow or it will be applied towards your closing costs.
- Mortgage insurance premiums quite low compared to FHA loans
- Expanded purchasing power with this program due to this program being considered a “low cost mortgage”
Which First Time Home Buyer Program makes the most sense?
All first time home buyer programs offered today are fixed rate mortgage loans, usually offered for 30 years. So at the end of 30 years your loan is paid off in full. The other added benefit of a 30 year fixed-rate mortgage is that you are free to make extra principal payments to pay off your loan sooner.
Initially, during the first several years of your mortgage loan, the majority of your payment will go to interest, then over time, as your loan balance continues to be paid down, the inverse happens. The majority of your payment starts going to principal with less going to interest and remains that way throughout the duration of your loan term. Browse through the first time home buyer programs today.