Most homeowners depend on mortgage loans and mortgage assistance programs to purchase a home. However, these programs are confusing as it is challenging to know who qualifies as a first-time home buyer and who is not. Let’s dive into it for better understanding.
A. FHA Mortgages (federal housing administration)
This loan is insured by the federal housing administration. An FHA home loan allows borrowers a loan with a lower down payment requirement and credit guidelines that may be easier to qualify for as compared to conventional mortgages. One thing to remember with FHA home loans is the addition of upfront mortgage insurance and annual mortgage insurance possibly for the life of the loan.
B. VA Loans
These loans are available for qualified veterans and active military members. VA borrowers can borrow up to 100% of the lower of the purchase price or appraised value of the home with no mortgage insurance. VA loan funding fees can be different for each borrower depending on how many times the benefit has been used and the VA disability status of the borrower. Also, it is possible for a VA borrower to have multiple VA loans if there are extenuating circumstances causing relocation. VA jumbo loans are also available to qualifying VA borrowers.
C. USDA Loans
USDA loans are for homebuyers in designated rural areas. These loans also offer low to sometimes no downpayment. Borrowers must be below the max income guidelines for their family size as designated in their area.