Many home loan programs have been specifically created for first time home buyers. These loans feature low down payments and approval guidelines that make it easier to qualify. Some of the more popular first time homebuyer programs are FHA and VA.
FHA is a loan that comes from the Federal Housing Administration. These loans are insured loans made by banks and other private lenders for building your first home or buying one. The goals of this organization are to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgage loans, and to stabilize the mortgage market
The FHA loan requires a 3.5% down from the borrower, who can use their own cash or receive a gift from a family member, their employer, labor union, or government entity.
Will You Need Mortgage Insurance?
If a home/property purchaser borrows more than 80% of the property’s value, the lender will likely require that the borrower purchase private mortgage insurance (PMI) to cover the lender’s risk. If the lender is FHA approved, and the mortgage is within FHA limits (as of November 19, 2012 for one-family: $697,500), the FHA provides mortgage insurance that may be more affordable, especially for higher-risk borrowers.
Other Programs for First Time Buyers
Another program for first time homebuyers is the VA loan. It is a loan guaranteed by the U.S. Department of Veterans Affairs. This option is designed to offer long-term financing to eligible American veterans, or their spouses (provided they do not remarry). The intention of the VA direct home loan program is to supply home financing to eligible veterans in areas where private financing is not generally available, and to help veterans purchase properties with no down payment.
Veterans may borrow up to 103.15% of the sales price, or a reasonable value of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment is able to go directly towards qualifying for the loan amount, which allows for larger loans with the same payment.
Mortgage lenders offer first time buyers with many home loan options and assist the buyer in finding the best home loan for them. First time home buyer programs can offer lower interest rates, low down payments, or reduced taxes.
Some Mortgage brokers in San Diego offer a wide variety of first time buyer programs to San Diego first time buyers. First time buyer programs in San Diego can make securing a San Diego home loan easier and more affordable. Contact your San Diego mortgage lenders for more details.
Finding a Broker
When looking for a reputable mortgage lender get a good name. The San Diego real estate market has tightened up tremendously this past year and having a lender with a good reputation can help you get a done deal. ask yours, or any reputable Realtor who they can recommend. That should give you a list of good names.
The following link will take you to some assistance programs for first-time homebuyers in the city of San diego: