Real Easy Mortgage

Zero Down Mortgage Loans – First Time Home Buyer Loan Programs

Because of a larger variety of mortgage loans available, first time home buyers may become easily overwhelmed with the home buying process. Understandably, those entering the housing market may not know which loan program best fits their needs. Working with a mortgage broker is helpful. They can guide you through the entire process and help you select a loan with the least out-of-pocket expense.

Main Setback of Purchasing a New Home

Buying a first home is an American dream. The home buying process involves paying out-of-pocket cash for down payments and closing costs. Unfortunately, many families are unable to achieve this dream because of having a small cash reserve.

Years ago, families would have to postpone buying a home until they had acquired adequate funds. Because of rising home prices, many families can no longer afford to wait. Thus, several first time home buyers are taking advantage of zero down mortgage loans.

How Do Zero Down Mortgage Loans Work?

There are many different types of mortgage lenders. Some lenders will only finance 80, 90, or 95 percent of the home price. Thus, homebuyers would need a down payment for the remaining percentage. With a zero down home loan, the lender offers 100% financing.

Zero down mortgage loans make the goal of purchasing a new home reachable. Even if a homebuyer cannot afford to pay their own closing fees, a mortgage broker should be able to locate zero down mortgage loans that offer 103% or 107 % loans. The majority of lenders require a high credit rating for the latter choices.

Options Available to First Time Home Buyers

First time home buyer loans offer unique financing, and most loans are tailored to individuals needs. Getting a home loan does not require good credit. In fact, several lenders are eager to offer first time home buyer loans to those with bad credit or past bankruptcy.

Home buyers can choose from several loan terms: 15-year, 20-year, 30-year, or 40-year. Lenders offer a variety of loan options, which create affordable living. Because of low interest rates, buyers can take advantage of a low fixed rate. Furthermore, there is also the popular interest-only mortgage option for those buying homes in overpriced markets.

Young families are now living their dreams thanks to a range of home loans designed especially for them. Gone are the days when bad credit or lack of funds meant you cant obtain a home loan to purchase the home of your dreams. While these factors may have been insurmountable factors in the past, they are no longer legitimate obstacles for the first time home buyer who is seeking a home loan.

New opportunities have appeared throughout the nation thanks to an abundance of creative home loan (mortgage) programs to help the first time home buyer who previously had been denied access to the housing market. There are credit workshops, down payment assistance plans, home buying initiatives and grants earmarked especially for first time home buyers springing up everywhere. Many people either don’t know about these first time home loans or grants or they don’t know how easily they can get them.

Overview of First Time Home Owner loans

Its difficult for young people to often buy a home since they are just starting out with their careers and may still be paying on a large student loan. Some people turn to first home buyer options to help with overcoming the money hurdles of the home loan. There are a variety of these programs to choose from and each one is different, depending on where theyre offered. The objective is this: first time home buyer loans give financial assistance to qualified borrowers. They have the options of doing this in the following ways:

-Allow for a very low (or no) down payment
-Subsidize interest costs (they pay all or part of it)
-Offer grants
-Forgive loans
-Limit fees that lenders are allowed to charge
-Defer payments

The Government will help with a home loan for first time buyers

Many first time home buyers are discovering they qualify for down payment or home loan assistance. The U.S. Department of Housing and Urban Development gives states and municipalities money to distribute to low- and moderate-income families to put toward their down payment or closing costs each year. Prospective homeowners can obtain up to 15,000 for a home loan. The good news is that sometimes, the money is made available as a home loan that is completely forgiven if the home buyer promises to stay in the home for three to five years. Some programs offer up to 10% of the purchase price. To qualify for down payment assistance, a person typically can earn no more than 80% of a region’s median income.

The first step for hopeful buyers seeking a home loan should be to contact their state housing finance agency. There are dozens of relevant agencies listed on the National Council of State Housing Agencies’ Website at http:www.ncsha.org. There is a wealth of information to be found online for first time home buyers seeking a home loan.

Prospective home owners should also check with their community development office and ask about home loan programs and grants offered for first time home buyers. Dont overlook local community organizations and church leadership. They may know of housing assistance programs in the community.

Usually the home buyer will try to put together several grants totaling the amount of the targeted home loan. Quite often local banks participate in issuing these home loans to first time home buyers. There are often strings attached but it can be a small price to pay for the possibility of receiving free money or financial aid that could not be obtained otherwise. Each home loan program will have its own individual set of rules.

One of the contingencies of receiving these home loans for first time home buyers is that prospective home buyers must attend several hours of informal counseling. The industry wants to make sure prospective first time home buyers know how to steer clear of predatory lending practices. They may also discover their credit score is good enough for a traditional mortgagehome loan.

Counseling Classes for Obtaining a Home Loan

The home-buying process can be confusing even for people who have bought several homes. Being familiar with offers, counter offers, appraisals, closing procedures and so on, before beginning the search will help alleviate some of the stress and allow a person to make more informed decisions.

Local first time home buyers counseling services offers home buyer education classes. The programs are free and open to anyone interested in buying a home.

Programs For first Timers

Banks, financial institutions, and even nonprofit groups, such as Goodwill are making it easier than ever for you to go from renter to homeowner. There are numerous programs available to provide down-payment assistance. These programs can alleviate some of the initial stress of coming up with enough cash upfront. The following is just a sampling of what’s out there.

-Wells Fargo www.wellsfargo.com. The Home Opportunities program is available to public employees and members of the military. It offers no-money-down, up to 100% financing on a single-family home, condominium, co-op, or multi-unit property.

-Washington Mutual www.wamu.com; WaMu offers potential home buyers deferred payment or low-interest loans, down payment and mortgage assistance, and shared appreciation mortgages.

-The Neighborhood Assistance Corporation of America www.naca.com ; Services from this nonprofit community advocacy and housing organization include home-buying workshops, financial counseling, and home evaluations.

-The Nehemiah Program www.nehemiahcorp.org; this is the nation’s largest privately funded down payment assistance program. Among the features of The Nehemiah Program are gift funds up to 6% of the final contract sales price to put toward down payment andor closing costs and financing for new construction or the purchase of an existing home. There are no income, asset, or geographical restrictions to qualify.

While they are a perfect fit for some, first time home buyer loans are the wrong choice for others.

Pitfalls of First Time Home Loan

For some first time home buyers, these programs are perfect. They open the door to home ownership where a family would not have been able to buy a home. Communities also benefit from first time home buyer loans – homeowners take care of their property, get involved, and contribute to the economy. Nevertheless, first time home buyer loans can be the wrong choice in some cases.

With a subsidized first time home buyer loan, you face some challenges:

-Lower value home may not be the home you want
-You might lose some of the benefits of the program if you sell your home too soon
-You may have to pay recapture tax for some of the benefits you received
-You may be limited to a short list of loan types (only 30 year fixed rate mortgages)
-You may have to share increased home values with the program

Given these restrictions, you may do best to avoid subsidized first time home buyer loans. Youll probably come out ahead using a plain-vanilla mortgage if youve got decent credit. With a FICO credit score above 720, you probably wont see an advantage with the subsidized first time home buyer loan. Once you get below 680, the subsidized program will start to look better. These days, you can get traditional home loans mortgages with very little down.

First Time Home Buyer? Mortgage Programs Designed Just For You!

So you are thinking of buying your first home? Congratulations! You are taking a big step that will help you realize the dream of many as well as build personal wealth. As a first time home buyer you should know that there are several programs available out there to help you get you into the house you deserve at mortgage terms that you can afford. Before you begin your search for your first home be sure you understand these programs and work with your mortgage lender to take advantage of them!

The biggest resource for first time home buyers is the Federal Housing Administration (FHA). They work by providing private mortgage lenders with guarantees (insurance) against the loan that you take out with them. They help home ownership become a reality for many who don’t have perfect credit or have the finances available to otherwise afford the hefty up-front payment sometimes required to buy a home. It is important to realize that they are not there to help you buy a home you cannot afford; they are there to help you to buy a home you can afford by providing guarantees and assistance up front. It is up to you to make sure that you are not buying a home that you cannot afford over the life of the mortgage note. Never get yourself into more debt than you can handle!

The process of applying for an FHA loan is pretty much the same as applying for a conventional mortgage. You will need to provide verified proof of your income over the past three years – yet what qualifies as income is relaxed a bit. Social security, alimony, rent paid by other family members and such qualify as income under the FHA program. In addition, short-term debt doesn’t count against you (short-term is defined as being able to be paid off in less than 10 months).

You are allowed to use up to 29% of your total income towards housing costs and up to 41% towards housing expenses and other long-term debt obligations. Again, it is up to the homeowner to make sure they can afford the home they want to buy. Just because the FHA relaxes the restrictions doesn’t mean you should buy a home that you have to struggle to afford each month.

Through the FHA they will help you get started on owning the home of your dreams – but remember, it is a cooperative process. You should still shop around at various mortgage lenders and try and negotiate the best rates possible no matter if you are a first time home buyer or a seasoned pro.

There is a wealth of information available about the FHA programs. Your mortgage lender should be able to provide you with extensive information and guide you through the process. You can also read up on it yourself at www.fha.gov.

In addition to the FHA, there may be state and local programs available to you to help offset some of the costs of purchasing your first home. Check with your lender to find out if such programs exist.

Homeownership is one of the pillars of the American economy. To keep it propped up, there are many programs to help first time buyers make down payments.

First Time Buyers Program – Down Payment

Are you a home buyer looking to buy your very first home? Do you believe you can make the mortgage payments on the home but just dont have enough cash on hand to make the down payments? Are you not able to buy the home because of this mortgage down payment problem? If this defines you, then dont be worried. There are many programs out there that can help you to make the down payment and move in to your very own home.

Firstly, check with the FHA – the Federal Housing Association. The FHA often offers many programs to various people who cant make the down payment on their home. The Department of Housing and Development is another organization that has many programs in place to allow first time buyers to be able to buy their very own home and get over the hurdles of down payment costs. Both of these organizations should be sought out right away and you should contact them and see what sort of programs and assistance you might be eligible for.

For minorities and low income families in particular, there is another big program in place that can be of great assistance. If you fall into one of those categories, you may be eligible for the American Dream Down Payment Initiative. Passed in 2003, ADDI allows for eligible first time home buyers to receive as much as 10,000 in assistance for making the down payment on their home.

In addition to these organizations, there are also many programs in place by states that seek to encourage first time home buyers. These programs often offer grants and other assistance to first time home buyers so that they can meet the down payment requirements for their home. Make sure to do an internet search for the housing department in your state to seek out information on programs relevant to your location.

First time home buyers who cant make their down payment should not worry, there are many programs in place that can help them. If you are a first time home buyer and need assistance, you can seek out many of these different groups so that you can be able to make the down payment and be able to move in to a home of your very own.

When was the last time somebody credible offered you thousands of pounds in free money? For most of us, that just doesn’t happen every day, or ever at all, for that matter.

However, if you are considering purchasing your first home, there are very credible sources that genuinely do want to give you thousands of pounds in free money.

Those sources are state and federal agencies, and the thousands of pounds of free money available comes to you in the form of a cash grant to help you buy your first home.

It is no secret that saving for a down payment and closing costs is the largest obstacle that first time home buyers must conquer. For millions of Americans, this obstacle is one that is nearly impossible to over come. After paying monthly rent, utilities, food, insurance, car payments, (as well as the high price of gasoline), clothing, phone bills, day care for the children, and many more recurring monthly bills, there is virtually no money left to set aside to save for a down payment for a future first home.

The federal as well as state governments recognize this situation and have created special programs for the very purpose of giving away money to help people in need buy their first home.

A reasonable person might assume that as soon as the money is available at the respective agencies, it is completely given away within hours, if not, days. It seems entirely logical that on the day the money becomes available hundreds and hundreds of people would line up just as fans do on the day that U2 concert tickets go on sale.

A reasonable person would be wrong.

Each year, the majority of state agencies do not completely exhaust their funding. For fiscal year 2006, only two states had requests in excess of their budget and ran out of money in their programs. For the first time home buyer, this is very good news. It means that there is currently money available to help you buy your first home.

The primary reason that the funding isn’t exhausted every year is that the programs are not widely advertised. There are 3 ways you can learn about these programs: you can buy the information, you can contact your state representative, or you can go to a website that provides all the information for free.

Whatever method you choose, you stand to gain thousands of pounds in free cash assistance towards the purchase of your first home. Choose one method and take action. Today could be one of those very rare days that a credible source offers you thousands of pounds in free cash.