When you take that leap from renting to owning a home, there are a lot of scary yet exciting possibilities. Your first thought might be wondering if you can even afford a first time home buyer loan. While going from the comfort of renting to buying a new home can be challenging, the rewards you get when you have your own home are worth the switch. Being a first home buyer in Georgia, it’s important to do your research with several reputable mortgage companies in Ga so you can find the best first home buyer program for you.
Freddie Mac or Fannie Mae First Home Buyer Program
As a first home buyer in Georgia, it’s important you look at all your first time home buyer loan options. To start, Freddie Mac and Fannie Mae are entities sponsored by the government that negotiates with local lenders to offer affordable mortgages to people with a moderate or low income. The backing of these government programs makes it possible for lenders to offer significantly reduced interest rates and a down payment as low as three percent. As part of its loan programs, Freddie Mac and Fannie Mae offer education and first home buyer assistance for first-time homeowners through a program that it calls HomePath Ready Buyer.
The FHA First Home Buyer Loan
If you’ve been reading up on first home buyer programs, you’ve probably heard of the FHA loan. The FHA insures mortgage loans to help reduce the risk to lenders so they can make a first time home buyer loan available to more people. The FHA, a division of the United States Department of Housing and Urban Development (HUD), assumes the risk of a homeowner potentially defaulting on the loan. The FHA loan offers competitive interest rates, lower closing costs, and smaller closing costs compared to a conventional loan.
The FHA makes an especially attractive first time home buyer loan if you have a credit score of 580 or above. After qualifying for the loan, you could make a down payment as low as only 3.5 percent of the purchase price of the home you want to buy. The down payment requirement is 10 percent for borrowers with a credit score lower than 580. Being a first home buyer in Georgia, it’s important to keep in mind that with loans such as an FHA loan, while you can make a low down payment this means your monthly interest will be much higher to make up the difference so you want to consider all of your loan options first.
The United States Department of Veteran Affairs (VA) loan is available to you if either you or your spouse are active duty or retired military personnel and you’re interested in first home buyer assistance. You can also qualify for a VA loan if your deceased spouse served in the military. Lenders can offer special features not available on another first time home buyer loan since the VA guarantees at least part of the loan. These benefits include:
- Competitive interest rates
- No down payment required
- No minimum credit score required
- No requirement to pay private mortgage insurance (PMI)
- The VA will negotiate for affordable payments on your behalf if you have difficulty paying your mortgage due to illness, job loss, or another common reason
As much as you might want to buy a new home, your budget will only allow for a fixer-upper at this time. Section 203(k) of the Federal Housing Administration (FHA) recognizes that supporting people willing to upgrade vacant homes is good for communities and the economy.
With this FHA-backed program, the government considers how much the value of the property will increase after you make the needed improvements. It then allows you to borrow this amount and includes it as part of your primary mortgage. Your down payment requirement can be as low as three percent. If you’re looking to fix up an older home, this first home buyer program might be the right option for you.
Finding a First Home Buyer Program with BrightPath Mortgage
As a first home buyer in Georgia, the options don’t stop with the first home buyer loans listed above. For first home buyer assistance and more home buying programs, BrightPath Mortgage is happy to help you evaluate these and other loan options to determine which one is right for you. Contact us today!