First time Home Buyer Loans – Plus and Minus!

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When you buy a house for the first time, it is not only a great deal, but also a great feeling for you. How much time and energy you would have spent in buying the house. To mobilize the necessary funds, you would have moved heaven and earth and, finally, you would have availed of a First Time Home Buyer Loan. These loan programs are based on the location of the property as well as where you live. The main idea of this type of no credit check loans is to help financially the qualified borrower. Certain benefits are there in this loan. You should search for them.

Take the right decision

These loan programs are mainly for those who have never owned a home. There are, however, some lenders offering this loan even to those who own a house, provided they have not purchased any house in the last three years. There are some income restrictions, to qualify as a first time home buyer. The purpose of such restriction is to benefit those who have low and moderate income. Those who earn much will not qualify. Similarly, even those who have reasonably huge assets will not qualify.

In many of these loan programs, there is a monetary limit fixed on the property you are going to buy. This means you cannot avail of this loan if you are thinking of buying a very expensive property. Another thing is, if you want to avail this loan, you should live in the house you are buying; if you are thinking of renting it out, you cannot use this loan. Apart from these restrictions, the home you are buying should meet a few ‘physical requirements.’ The property must be in perfect condition; it should be free from any possible safety hazards like lead-based paint, to cite an example.

This loan program is quite good for some of the first time home buyers. This paves the way for their home ownership, which otherwise would not have been possible for them. The local community also stands to benefit with the arrival of such first time home buyers because, as a home owner, the individuals will take care to maintain the property and get involved in the community activities, thus contributing to the economy. Some negative aspects are there: price restrictions, prospects of losing benefits if the property is sold, payment of tax for the benefits received, and limitation of the loan period with fixed rate mortgage – these are the negative factors in this bad credit loans program.

Now that you have got all the pros and cons of this loan program, it is time for you to take the right decision. In case you have a good credit, you consider availing the ‘plain-vanilla mortgage.’ If you have a credit score of more than 720, then there is no point in going for the first time home buyer loan. Besides, there is a possibility of your getting traditional mortgages or FHA loans which require very little down payment. So, you explore all these options; also find out what the regular mortgage lenders will offer. Compare all the details and then take a final decision.