Are you thinking about buying your first house? Did you know that there is in fact more than one type of mortgage? First time home buyers who are better educated in their options experience much less stress and overall have a better experience when buying a home. Below we will talk about different mortgage options available to first time home buyers in Grand Rapids, MI and abroad.
1. FHA Loans are great for first time home buyers. FHA loans are federally insured loans. This type of loan accepts a wide range of credit scores. The minimum required down payment of 3.5% is extremely low which is great when you are buying your first home because it will leave you more cash after close for any projects that may arise. In addition to low down payments FHA loans also have low closing costs.
2. If you find a home in the perfect neighborhood that needs some repairs, another option with FHA is the 203K loan. This type of loan covers the cost of the property and the cost of necessary home repairs and upgrades. The repairs that qualify for this type of loan usually include: disability access, heating, air conditioning, plumbing, roofing, flooring, energy conservation, kitchen remodels, new appliances, room additions, decks, patios, bathroom remodels, new siding, finish attic or basement, and site grading. Labor costs can also be included in the loan. These repairs do need to be completed within six months and must be executed by a licensed professional. In a nutshell you can buy a home, choose the repairs and upgrades you want, have someone do them, and then finance all of this into your mortgage. Restrictions apply see your lender for details.
3. Another great loan option for first time home buyers is the Rural Development Loan. This is a zero down home loan for buyers purchasing a home in “rural areas”. If you are buying your first house, hearing something like no money down could be the difference between continuing to rent or being able to buy that house. This type of loan also has low monthly mortgage insurance, which helps you keep your monthly mortgage bill down. The RD loan does have some restrictions, so please contact us for mortgage details.
If you do have money to put down on a house and good credit a conventional loan might also be a great option depending on your current situation. Conventional loans often times have lower interest rates and lower mortgage insurance costs than government loans. loc
If you aren’t sure which loan is the best for you to buy your first house then don’t hesitate to give us a call. We can guide you to the right type of loan for you. We love helping first time home buyers in Grand Rapids. We are a local mortgage company in Grand Rapids, MI and look forward to working with you.