There are several advantages to obtaining a first time buyer mortgage loan. The most important reason for doing so is because it makes home buying easier for those who may be just entering the process of buying a home. Also, consider the many other benefits this type of loan can offer. Most notably, lenders who offer these loans are often willing to provide significant savings opportunities. For those who wish to buy their first home, using an FHA or other first time loan program may be the ideal route to take.
Why Do Lenders Offer Better Rates?
If you walked into a lender’s office today and requested a conventional loan, the lender would use your income, credit history, and other factors to determine how much of a loan you could afford and what interest rate you would pay. This will likely be more than what you would get through a first time buyer mortgage loan. The reason is simple. Lenders who offer these loans, often called FHA loans, are receiving a bit of government backing. They can file a claim with the federal government to cover their lost investment if you default on the loan. Because they have this security, they will offer lower interest rates.
This also impacts other factors of the loan. It means you will not have to have a large down payment. You may not need to have a high credit score. Though you still have to have an income and prove that you are creditworthy, it is easier to obtain these loans.
A first time buyer mortgage loan can work well for many people who are buying their first home or those who have not owned one, in some time. Take a closer look at how they can help you.
Securing a first time buyer mortgage loan can be hard, go to Guaranteed Rate for options. See how they can help at website