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The Best Mortgages For First Time Buyers – A white circle with a black border around a chevron that points upwards. It says “Click here to return to the top of the page”.
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The Best Mortgages For First Time Buyers
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How Much Should You Put Down On A House? Not 20%
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If you’re a first-time homebuyer and struggling with the credit and down payment requirements that traditionally come with getting a mortgage, these first-time homebuyer loans can help you overcome those hurdles and finally own your own home. the keys. .
Note: The definition of a first-time home buyer can vary from lender to lender, but many U.S. The Department of Housing and Urban Development uses the definition, which includes people who have not had a primary residence in the past three years. Also, many of the loan programs listed here allow non-first time home buyers to apply.
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All the mortgages listed here have features that are available to first-time home buyers and other cash buyers. Not all allow a minimum or down payment, and many do not require private mortgage insurance (PMI).
PMI is usually required on mortgages with less than 20% down. PMI is a cost added to your monthly mortgage payment that the lender charges for allowing a smaller down payment.
Many of these mortgages also have flexible credit requirements, such as allowing borrowers to use non-traditional credit to qualify. Keep in mind that some lenders will only allow you to do this if you don’t have a traditional credit score. If your score is low, you’ll need to keep working to improve it before you qualify for a mortgage.
What type of loan is best for first-time buyers? Chevron icon This indicates a detailed section, menu, or sometimes previous/next navigation options.
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First-time home buyers are attracted to government-backed mortgages, such as FHA loans, because of their strict credit requirements and low down payments. First-time buyers may also like conventional mortgages because they allow payments as low as 3%.
How do I find down payment assistance? Chevron icon This indicates a detailed section, menu, or sometimes previous/next navigation options.
Your state or local housing authority may offer some type of down payment assistance, and many nonprofits have programs to help buyers pay. You can search online or contact your state housing authority to see what is available in your area.
How do I buy a home for the first time? Chevron icon This indicates a detailed section, menu, or sometimes previous/next navigation options.
Best Mortgages For First Time Buyers
Apply for pre-approval with three or four lenders to get an idea of the loan amount, terms and rates available to you. Once you are pre-approved, contact a real estate agent to find a home. You may decide to contact an agent first and get recommendations from them about good lenders in your area. Professionals working with you can help guide you through this process.
How much to go down on a house? Chevron icon This indicates a detailed section, menu, or sometimes previous/next navigation options.
The old-fashioned answer is 20%, but many people don’t put it that low. Conventional mortgages allow a down payment of up to 3%, while FHA lenders require a minimum of 3.5%. If you qualify for a USDA or VA mortgage, you don’t need to make a down payment.
What Credit Score Do First Time Buyers Need? Chevron icon This indicates a detailed section, menu, or sometimes previous/next navigation options.
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First-time home buyers may not be subject to different credit score guidelines because they are first-time buyers, but some programs designed specifically for these borrowers may have different requirements. A minimum score of 620 is required if you’re trying to get a mortgage, although you may qualify for a 580 or 500.
Bank of America’s Affordable Community Loan Solutions mortgage is a very affordable option for qualified borrowers because you don’t need to pay a down payment.
Flexible credit requirements: no minimum credit score; Using rent, utility, phone, or auto insurance payments to establish a history of on-time payments.
What to look out for: According to the bank’s press release, this mortgage is only available in “select markets,” including certain historically black and Hispanic neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. To qualify, you must meet income limits and complete a homebuyer certification course.
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US Bank’s American Dream Loan requires a minimum 3% down payment and comes with a generous amount of down payment assistance.
If your student loans kept you from qualifying in the first place, you may be in luck with this loan program; Bank of America says it will work with borrowers on income-based repayment plans.
This loan comes with up to $10,000 in assistance that can be used for a down payment, closing costs or other costs associated with buying a home.
Flexible credit requirements: accepts non-traditional loans if you don’t have a good score. If you have a credit score, it must be at least 640 to qualify. A debt-to-income ratio of less than 43% is required.
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What to note: This mortgage is available in 25 states. You are required to contribute at least $1,000 of your own funds at the time of closing. Income restrictions apply.
PNC Bank’s PNC Community Mortgage is one of our favorite options for borrowers who can afford a small down payment.
In addition to low and no PMI mortgages, PNC Bank offers a $5,000 closing cost grant for people who meet income limits or live in a low- or moderate-income area.
Flexible credit requirements: PNC Bank says this loan has “flexible” requirements, and many borrowers find it easier to qualify for a PNC community mortgage than a conventional one.
First Time Buyer
Choosing the Navy Federal Credit Union loan is a good option for Navy members who do not qualify for a mortgage backed by the US Department of Veterans Affairs because this loan has a down payment and PMI. Works like a VA loan without.
Flexible Credit Requirements: There are no specific credit requirements listed for this loan, but Navy Federal Online notes that it will consider your credit score and your banking history with this credit union.
What to note: You must be a member of Navy Federal Credit Union to get a mortgage with this lender. Membership is only available to Veterans, Armed Forces, Department of Defense or National Guard or immediate family members of members.
Wells Fargo dream. Make a plan. The mortgage is one of the most expensive mortgages on our list, due to the 3% down payment and PMI requirements. But it’s still an overall affordable option for borrowers looking to put down cash, and its $5,000 closing credit is a worthwhile perk.
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This mortgage can be combined with the Wells Fargo Dream. Make a plan. Home Closing Cost Credit. With this loan, borrowers can receive up to $5,000 in closing costs. Credit is only available in certain areas.
What to look out for: Unlike most mortgages on this list, this mortgage requires PMI, making it a bit more expensive than your other first-time homebuyer loan options. Income restrictions apply.
The Northpoint Bank 100% mortgage is a great option for borrowers with good credit, but it’s not as flexible as the other mortgages on this list.
Northpoint has another 0% down product called Equity Builder. With this loan, you use the money you save for a down payment and instead pay for a lower rate or shorter loan term.
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What to note: This mortgage is available in 23 states. There are no income restrictions to qualify.
Citibank’s Homerun mortgage is a good option for borrowers who need to apply with non-traditional credit, but the high down payment requirement that comes with it may not be worth it. Citibank’s closing cost assistance is higher than most
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