Dream homes are on the mind of every single individual financially eligible to buy their own house. Buying a house however is quite a task, both on the financial and mental setup of the buyer. However, there are government and non-government aids that can help a first time buyer purchase their house with a little lesser stress. First time home buyer loans are one such facility. There are multiple types of Denver home loan lending bodies that can help you get the required financial help for this purpose, if you are buying a house for the first time.
What are first time home buyer loans?
First time home buyer loans are the type of loans, exclusively applicable to first-time home buyers. Here, interested buyers can opt for buying their houses through various mortgage and loan programs offered by the government and other lending agencies. However, the only clause to qualify for this loan is that the borrower should be a first time home buyer.
Who is a first-time home buyer?
- First-time home buyers are those individuals who haven’t purchased any property in their name, till date however, intend to buy a house under their account, now.
- Such category of buyers is eligible to avail special home loans and facilities under government based assistance programs only in case they aren’t repeat buyers. The perks of such loan system only apply to the first time home buyers.
- However, there can be exceptions under some lenders wherein they consider offering a loan to “first-time home buyers” or an individual who doesn’t own any property under his name during the last three years.
Home ownership under such scheme requires a set of requirements to be fulfilled. Here’s what one should know on it!
The requirements for enjoying the perks of first time home buyers loan facility are-
- Must possess a credit score of at least 620.
- Must be ready to pay the down payment of at least 3%
- Must hold a debt-to-income ratio below 43%
- Should hold a steady income.
- Should hold evidences to prove two continuous years of his/her job history.
- Should hold a clean credit history.
- Should either be a first-time home buyer or shouldn’t have owned a house in the last three years.
If all these criterions are met, one is eligible to apply and take privilege of the first-time home buyer programs.
How to qualify for first-time home buyer loans?
Qualifying for your first-time home buyer loan needs a few things to be kept in mind. Here are a few things to consider-
- Know your eligibility and match the qualifications
Make sure you match all the qualifications and terms and conditions laid by your chosen lender. This includes the term of the loan, your credit scores, maintained debt to income ratio, a steady income, etc. If all these criterions are matched, you will automatically qualify for the loan.
- Keep your documents ready
There is a list of documents that will be required to be submitted for the loan approval process. Keep all your documents prepared, in advance so that you do not delay the approval process. Keep the documentation process transparent and legitimate to avoid any troubles on the way.
- Make sure to opt for advance validation
Apply for advance validation process by submitting all the required documents to your lender. This is the key to quick mortgage closings.This will keep you informed of the entire process flow in advance and with this, you can keep an eye on how much loan can be granted to you.
- Keep the down payment ready
In order to qualify for a home loan, one needs to pay at least 3% of the total amount as the down payment. So, make sure you have done enough arrangements and preparations for paying the down payment in order to qualify for the home loan.
- Don’t buy any property for at least 3 years prior to applying for the loan
It is very important to hold no property or home ownership under your name for at least 3 years prior to applying for a first time loan facility. If you have purchased or owned any property during this course, you can fail to qualify for the loan facility. So, make sure, you haven’t purchased any house under your name for this period of time.
There are multiple types of home loans being offered by the Federal government to ease the process of home buying. However, availing the right loan will depend on the type of loan and the lender you choose to opt for. It is however, always recommended to choose the highest rated mortgage lender for your loan facilitation. This will not just make the process easier and transparent but also avoid any unwanted situations or hidden costs that generally comes as a surprise with non-recommended lenders.