Buying Your First Home

Being first time home buyers can be exciting but overwhelming at the same time. Before you start your househunt, you need to obtain a mortgage qualification.  That way, you know what you are able to afford and are able to make a smart financial decision instead of an emotional decision. You may be asking yourself, “What’s the right home loan for first time home buyers?” There are many different loan options for first time home buyers- for example, you may need help with a down payment or prefer to have low monthly payments.  Certain loans may fit your needs better than others. Here’s what you need to know when picking your home loan.
picking the right loan for first time home buyers
100% Financing Options:

VA Loan:  If you are a veteran or active duty, you may qualify for a loan from the U.S. Department of Veterans Affairs.  A VA loan is a great program because there’s no money down, no mortgage insurance, and it is guaranteed by the government.  In order to qualify, you’ll need a Certificate of Eligibility, good credit, and enough income.

USDA Loan:  The United States Department of Agriculture (USDA) offers loans with 100 % financing.  A USDA loan is not just for farms and rural areas- many suburban areas in Connecticut actually qualify for the USDA program.  A USDA loan requires no money down and are insured by the government.  You even can include eligible home repairs and improvements in your loan size.  However, this loan type has income limits- the most a couple is allowed to earn jointly is $99,200.  USDA mortgage rates are often lower than rates for comparable, low- or no-down payment loans.

CHFA Loan: Connecticut Housing Finance Authority (CHFA) offers loan programs specifically for first time home buyers in the state.  Qualified individuals must not have owned a home in the last 3 years. CHFA loans are broken up in a first mortgage and a second down payment assistance loan.  Like USDA, there are income limits.  CHFA interest rates and typically offered below market interest rates.  CHFA also offers incentives to police officers, teachers, those not in the military, as well as individuals with certain disabilities.  

Below are a few loan programs that require a low down payment:

FHA Loan:  The FHA allows a down payment of just 3.5 percent of the loan amount.  A great thing about FHA loans is that the down payment can be entirely from gift funds.  A minimum credit score of 500 is required.  There is an up-front mortgage insurance premium due at closing as well as a premium for the life of the loan.  

Conventional 97 Loan:  A new option for first time home buyers available from Fannie Mae and Freddie Mac is the Conventional 97 program.  This program allows for just a 3 percent down payment, which can be entirely gifted.  The home must be a single-unit and the loan size must not exceed $417,000. The loan must be a fixed rate mortgage.

If you are thinking about buying your first home, feel free to give me a call at 860.916.4749.  By just providing me with a few documents, I can get you pre-qualified today so you can start looking for your home tomorrow!

Thank you,
Victoria O’Brien
NMLS#1307487