With low mortgage rates, increased construction, and growing incomes, millennials
are finally entering the home buying market. Although the market is good, buying a
home is never easy, and first-time homebuyers often see buying a home as an
especially daunting task.
If you are considering joining the millions of Millenials buying their first home in
2018, check out our home loan guide to make your dream home shopping go
If You Are a First-Time Buyer, You’re a Bigger Risk
Don’t let this fact deter you. But let’s get it out of the way: you are a bigger risk to
lenders compared to an experienced borrower. This is due to the fact that you don’t
have a documented history of paying your mortgage on time—this can mean it may
be difficult to find a lender willing to offer you a discount.
Types of Loans
Home Loans With The Lowest Down Payments
If you’re a first-time home buyer, you may be strapped for cash to put towards a
down payment. If you fall into this category of buyers, don’t fret, you have plenty of
options. Some lenders are backed by Federal entities, which helps keep costs low
these home loans are classified a few different ways.
Fannie Mae and Freddie Mac Loans
Both of these types of loans offer 3 percent down programs, although they contain a
few important differences and different requirements. Ask a lender to get you up to
speed on these loans and have them help you determine your best option.
VA No Money Down
If you are a veteran or active military member or spouse, you can buy a home with
zero down using a VA loan. You will need a Certificate of Eligibility based on your
service—your lender can help you get one.
FHA 3.5 Percent Down
The Federal Housing Administration (FHA) offers loans that require 3.5 percent
down. These loans are more lenient in terms of income, credit scores and savings
than the Fannie Mae and Freddie Mac loans.
Home Loans That Cost Less per Month
Piggyback loans occur when a borrower takes out two loans simultaneously. Your
first mortgage should be able 80 percent of your home’s value, and your second
mortgage should amount to 10 to 15. This eliminates your mortgage insurance.
Buying your first home is an exciting time in your life, but it can be stressful. We are proudly serving cities like Springfield, Kansas City, and St. Louis, MO and would be happy to help you. Contact the mortgage experts in our office in Joplin, MO to learn more about ways we can assist you in acquiring a loan with the best rate in Missouri.