First Time Home Buyers? Know Your Home Loan Options

Having your own home gives you a sense of pride, freedom, achievement and security, but deciding and buying it is for the first time is one of the biggest steps one can take in life and for many it is also a biggest investment decision ever. So if you have decided to buy a home make sure everything is done wisely and the first step is deciding what the type of home, size of residence, location, and surrounding in which you would like to live.

Besides, the most important factor that comes into picture is arranging finances for buying a home. You can pay the cost in one go if you have big pocket, however if not then you can choose any of the below listed loans. A little homework about the types of home loan options available to you can help you make an informed decision without wasting much of your time and energy. This brief read gives you a basic idea about the types of home loans available for buyers.

Types of Home Loans Available in the U.S.

Arranging finances for home requires special attention as it is not every year that you plan to buy a new home. Here are some common types of homes loans and their key benefits available in the market:

Conventional Loans

Conventional loans are types of mortgage loans offered by private lenders, some of the types their key benefits are listed below:

Fixed Rate Loans and Mortgages

Conventional fixed-rate mortgages as the name suggests have fixed rate for at least some period, which makes it easy for buyers to predict the timeframe in which they can pay off the loan. This loan is worth considering for buyers who plan to stay in the home for longer duration. Also buyers who have good credit history.

Jumbo Mortgages

Jumbo loan is beneficial for virtually every borrower irrespective of their good or poor credit card history. Moreover, the borrowers are allowed to take more debt as opposed to normal loan limits. This kind of loan is worth considering for buyers who know that they will be moving out of the home in a couple of years.

FHA

An FHA mortgage loan is guaranteed by the United States Federal Housing Administration. Only a Federal Housing Administration approved lender can lend the loan. FHA loans are framed to enable borrowers with less income buy home, if they are unable to secure any other financing options.

VA loans

VA loans are especially for Veterans of American Armed Services framed by the United Department of Veterans Affairs and only an authorized lender can lend VA loans. The goal of the loan is to help veterans and their spouses to obtain long-term financing. In case veterans are not able to get private financing, the program helps them to buy home without having to pay any down payment.

A few Parting Words

Although there are multiple financing options for borrowers, unfortunately many find it difficult to find the right type of loan. Some borrowers make wrong choices and lose their savings paying off the loan, some have already lost their home waiting for mortgage approval. If you don’t want any of these circumstances in your life, it will be a good idea to consult first time home buyers Loan Experts in your area.