First time home buyer lender
Who is first time home buyer?
Generally, majority of the people live with their parents until they are older and able to fend for themselves.Once they complete their education and start earning they get married and settle down.At this phase of life, majority of the people start living separately and want to buy their own home.These types of people are called as first time home buyers.
Who is the first time home buyer borrower?
As mentioned above, most of the people who plan to live separately by living in their own home are first time home buyers.They do not have money to buy their own home as they just have not collected sufficient cash.These people need money to buy home therefore they go in for home loan schemes and these kinds of people are generally called as first time home buyer borrower.Also people from low and moderate income group may fall in this category.
First time home buyers lenders:
These are the finance institutions which offer loans to the first time home buying people.Usually a first time home buyer is unable to pay down payment to the lending company.There are many lending agencies that are coming forward to offer loans to the first time home buyers.These lending agencies understand the genuine economic problems of the first time home buyers; therefore they have special lending programs for such people.Generally these lending companies offer lending programs for first time home buyers with only 10 to 12 % down payment instead of charging for the insurance of mortgaging.If a first time home buyer has a good past loan credit and a stable job than the lending companies normally dont ask for any down payment from them.However, when you do not pay any down payment at all, you have to pay big size repayment installment.
Some lenders offer some concessions on the size of the down payment even if a first time home buyer has a bad credit and very low salary.Some first time home buyers have extremely bad credit and no private lending company qualifies them for loans.Under such circumstances these people can approach the Federal Housing Administration board.This board offers loans with more lenient credit criteria.A down payment of as low as only 3% of the total loan cost is acceptable for getting the Federal Housing Administration home loan.Also there are some lenders in the loan market who use the loan closing cost of a bad credited first time home buyer, as some percentage of his down payment to make him qualify for the home loan.Some lenders pay the closing cost for this borrower while there are some other lenders who charge a premium interest rate as a rebating price to fund the closing cost of such first time home buyer.This interest rate may be higher than the conventional loan by around half to one percent.This interest rate varies from lender to lender.However there is no income limit for the Federal Home Administration loan, so this lending agency is very popular among the first time home buying people.
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