Buying your first home is exciting. You can look forward to having a space of your own, decorating the way you want to and enjoying a family-friendly neighborhood.
It can be scary, though. Moving from a rental home to home ownership is a big step. While the mortgage payments may appear to be smaller than rent at first glance, purchasing a home means you’re making a long-term agreement. You’ll be going into debt for up to thirty years.
Without knowing what the job market will be like years down the road or where your career will take you, how can you make a decision that big?
Thankfully, there are some great financing options available for first-time home buyers. Browse through the following lists. Maybe one of them will meet your needs and help you buy your first home.
These loans can help you get into a home for 3.5 percent to ten percent down, depending on how good your credit score is. They’re backed by the Federal Housing Authority, and they provide protection to lenders, so they don’t experience loss in the case of foreclosure.
FHA Section 203(k)
This loan is specifically for fixer-uppers. If you’ve decided on a home that you’ll be repairing, this type of loan can help you get in for as low as 3 percent down and incorporate the costs of repair and renovations, as well.
Good Neighbor Next Door
If you’re a firefighter, an EMT or a pre-K through 12th-grade teacher, you might qualify for this loan. Sponsored by HUD, this loan can help you get up to 50 percent off the home’s listed price in certain areas.
These loans are targeted to rural areas. They allow home-buyers to get into a home with fixed payments and sometimes no down payments. These vary from region to region, so ask your lender what’s available in your area.
These loans come with competitive interest rates, no down payment, and some special features. They only apply to active-duty military members, veterans, and surviving spouses.
Fannie Mae or Freddie Mac
Loans sponsored through Fannie Mae or Freddie Mac are meant to help low income and moderate-income families. They work with local lenders to help provide loans with low down payments (sometimes as low as 3 percent) and competitive interest rates.
Energy-efficient Mortgage (EEM)
These loans are meant to help home-buyers make energy-efficient updates to the home they’re buying without having to pay more for down payments (although the cost of renovations is added to the total loan amount). They’re insured through the FHA or VA.
Native American Direct Loan
This loan aims to help Native Americans and their spouses purchase homes on federal trust lands. It offers no down payment, and you don’t have to pay for private mortgage insurance. First-time homebuyers also get fixed payments for a 30-year loan and low closing costs.
Local grants and programs
There might be special financing available depending on where you intend to purchase your first home. For example, some cities offer aid for buying in their revitalization loans. Visit the local websites to find out more or place a call to a city or county official to find out more.
Economic development offices might be a great place to start looking.
No matter which direction you go, knowing that there are financing options available can help make the leap from renter to home-owner less frightening.