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First Time Home Buyer Mortgages Has Choices

Do you want to know how to find the best first time home buyer mortgages? Well you come to the right place because I want to share with you some cool mortgage choices below.

With the right information found on this webpage, you could discover how to get a 50% discount on your home thanks to HUD or perhaps zero or low down payment mortgages. Even after this major mortgage meltdown, these programs are still on the books!

So then, keep your eyes glued to this page because what you're about to read can save you thousands of dollars. In fact, you will find out how to use Government backed loan programs that are little understood, yet have been around for decades. So are you ready to learn about some first time home buyer mortgages that can work for you? Here's the first mortgage choice....

First Time Mortgage - The Good Neighbor Next Door Program (GNND)

first time home buyer mortgages

When you purchase a single family property under the GNND program, HUD will give you a 50% discount on your mortgage. Is that crazy or what? Did you know there were Government programs out there like that one?

Most people do not know. However it does come with a few hitches though. I know, by now you are saying I knew it was just too good to be true. Well let's talk about the requirements briefly and if you want additional details on this program, I'll give you a few links to follow to help you along.

First, you have to be a public servant to qualify. So this means you have to be either full time law enforcement officer, fireman, teacher or a firefighters/emergency medical technicians for one of these first time home buyer mortgages. There is a certification program you must comply with so don't think you can fool anybody. It is strictly controlled to avoid abuse.

You must agree to live in the house for at least 3 years and each year on the anniversary of your closing date, you have to supply an annual certificate sent to you by HUD's loan servicing contractor C&L Service Corporation. A certificate is mailed to you each year that requires a signature that carries serious penalties for non-compliance. Falsifying this document is a felony. There are exceptions for those on active military duty that allows you to rent out the property while overseas or on duty.

You can get a 50% discount off the HUD appraised value of the home. So if you found a home for $100,000 that you liked, it would cost you $50,000. Again you would have to occupy the home as your principal residence for at least 3 years.

HUD will take back a second mortgage for the other $50,000 that will get forgiven after the three years is over. It has to be a home in a HUD designated revitalization area. The idea behind these first time home buyer mortgages is to put model citizens from the community into the neighborhoods to improve the area and stabilize property values.

If you qualify for an FHA 203k mortgage you can buy the house, make the needed improvements to get the home ready to move into and you could find that your down payment would only be around $100. Not too bad right? This is a great first time home buyer program. It has been around for many years, the name has been changed several times.

There are other requirements for first time home buyer mortgages that must be met, but that gives you the 30,000 foot view of the program. Now let's look at another cool possibility.

USDA Rural Development Program

OK, so maybe you do not work in a public service job. So can you find some good first time home buyer mortgages that will work for you? Yes you can. Now this program is the complete opposite of the Good Neighbor Next Door program.

The GNND would most likely be homes in the city while the USDA Rural Development program is exactly what it sounds like. It is for homes in rural areas. Once again, this is a Government backed program designed to build up communities in the rural areas.

Low to moderate income families can qualify for this Government backed loan program. You can buy a house with zero down payment in some cases. With a loan guarantee like this, lenders are more willing to take a chance on you.

To be eligible you have to have adequate and dependable income. You must be a US citizen or a legal alien. Also you must meet certain income guidelines that are established for the area. Furthermore. you must have a reasonable credit history showing you have a desire to meet your bills when they come due. Your debt to income ratio cannot exceed 29/41.

The beauty of this is the home can be a brand new home that was just built or a home that meets the guidelines of the program and found in sound condition. There are no restrictions on size or design of the home. Again, it must be your primary residence and cannot be used for income producing like a rental home.

The biggest draw back to these kind of homes is where they are located. The definition of a rural home is a home in a community of 10,000 people or less. Sometimes you may find you can be in an small town or city with 10,000-25,000 people. So your drive to work would become the obstacle here to take into consideration.

It still remains one of the greatest first time home buyer mortgages out there. Imagine that, a house in the country, no down payment and depending on your income the Government will help you get a very low interest rate to make the monthly payment affordable.

Now let's look at a cool option that most can fit into.

The Mortgage Choice of FHA Loans

Last and certainly not least is what I feel is one of the best first time home buyer mortgages out there. That is the FHA home loan. Like the other two programs this is a Government backed loan program. It has been available since 1934. Millions of Americans have purchased their first home using this awesome loan program.

Unlike the GNND program it does not matter what your line of work is. Also it is different from the USDA Rural Development Program because it does not matter where the home is located. A home purchased with an FHA loan has to meet the FHA appraisal guidelines to be eligible for the FHA loan guarantee. So both the house and you as the buyer have to measure up to the program requirements.

Don't worry, it's not as hard as you think. The biggest problem for many people is finding a good loan officer and real estate agent that understands how this program works. But you are a smart person and have been reading right here at this website about first time home buyer mortgages and may even know more than many real estate agents and loan officers.

I get questions all the time from real estate agents and loan officers about the FHA program. At one time when I was in the mortgage business, I helped hundreds of people buy homes using this program.

The main qualifications are: you must have at least 620 credit score, a 2 year history on the job and 3.5% down payment. The beauty of this program is you can have up to 3% seller concessions. These can be used towards your down payment.

Again it takes a loan officer that understands how these first time home buyer programs work with the down payment help that is out there. So once again, you could get into a home with a very low down payment.

Below I'll provide a link to what those appraisal guidelines are.

First Time Home Buyer Mortgages Conclusion

To sum it up, you have learned about just 3 of the options you have open to you. Only you can decide what will work best.

Depending on your line of work and commitment to your community you could choose the Good Neighbor Next Door and get a really great deal on a home in an area that needs stabilizing. Or you could buy that brand new house in the rural areas around your town. And last, maybe you want to live in the city or even the suburbs, the FHA loan program may work well for you.

The FHA 203b is the most popular and some people use the FHA 203k when buying a home that needs to be remodeled before moving in.

At any rate, you now have 3 very good first time home buyer mortgages explained briefly to you. Use the links on this page to read more about each one of them.

Where Would You Like to go Next?

Remember, I said I would give you a link? So here's the link that explains the FHA appraisal guidelines.

Are you ready to apply for that first mortgage? Then you may want to see if you are eligible at Apply Online for Mortgage Loan.

But should you go to a mortgage broker or a banker? The page Mortgage Broker vs Mortgage Banker will give you the pros and cons of either choice.

How can you prepare for your meeting with the loan officer? Read the page Meeting With The Mortgage Professional for tips to prepare for that important meeting.

Next you may want to know what to expect once the application is filled out by reading After the Mortgage Application. This will give you some tips on what not to do while your application is being processed.

Are you in a hurry and want to make sure your loan process is not delayed? Then the page How to Speed Up the Mortgage Process will be a great help.


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