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I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.

What are the Mortgage Options for First Time Homebuyers?

Buying your first home is a unique experience. For many, it comes with a mix of excitement and worry. The process is unfamiliar, and you don’t want to make any mistakes. It is also a decision that could affect your financial future for many years.

You might not know much about the mortgage options for first-time homebuyers.

A mortgage isn’t just one mortgage. There are different types of home loans. Picking the right one can save money or make it easier to service the loan over the years. This post will cover some of the mortgage options available to first-time homebuyers.

Mortgages for First-Time Home Buyers

Conventional Mortgages

These are standard mortgages from financial institutions and mortgage lenders like InstaMortgage. The government does not insure or back these loans. However, they are some of the most advantageous for the borrower. They tend to come with the lowest costs.

Conventional mortgages also have some of the strictest standards for approval.

You will need a higher credit score and a larger down payment. Lenders also require a lower debt-to-income ratio for these mortgages. There may also be a requirement for private mortgage insurance.

FHA Mortgages

The Federal Housing Administration (FHA) runs various mortgage programs to make ownership more affordable and accessible. Mostly, they back or insure home loans from approved private lenders.

These mortgages can be particularly beneficial to first-time homebuyers because the requirements are more relaxed. You do not need as high of a credit score to get approval. The down payment requirements are also lower. Depending on the circumstances, you could get a loan with as little as 3.5% down.

With that said, these loans tend to cost more to service. Each month, your mortgage payment will also include the costs of a mortgage insurance premium.  The upfront costs might be lower, but the overall cost will be higher over the life of the mortgage.

VA Loans

These mortgages come with the backing of the Department of Veteran Affairs. The VA doesn’t issue loans. Instead, they work with qualified lenders to guarantee the loans. However, borrowers need to meet the eligibility requirements from the VA.

It can be a good option if you are a veteran and a first-time homebuyer. The idea is to make homeownership more accessible to veterans.
VA loans allow veterans to get loans under better terms. This includes the option to get a loan with no down payment.

These are a few of the mortgage options for first-time homebuyers. You should also look into mortgage programs from the state and local government. Some of these programs can make your first home more affordable.

Do you want to learn more about mortgages? We can help!  You can also learn about mortgages by reading more posts or checking out our guides.

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