First Time Homebuyer with Bad Credit
If you are a first time homebuyer with bad credit, you may be interested to know what bad credit home loans are available to help you finance your home purchase despite your current credit situation. There are three specific kinds of bad credit loans for first time home buyers that you may qualify for. These are FHA loan, VA mortgage loans, and a subprime mortgage. Typically new home buyers with low credit scores have difficulty qualifying for equity loans because there” loan to value” is too high. There are some useful tips for 1st time home buyers that you may want to utilize as well. VA and FHA rates are typically 1 to 2 percentage points lower than subprime rates.
FHA loans are excellent bad credit loans for first time home buyers because they let you get into the home of your dreams with 3.5% down or less. There are even specific down payment assistance programs that can help you as a first time homebuyer with bad credit to get into your home with no money down. There are various kinds of housing units that first time home buyers move into, so you will need to understand which bad credit home loans will be the most advantageous for your plans.
The VA mortgage program is designed for first time homebuyers who are veterans of the armed services. More than 29 million veterans are eligible for VA home financing, and you could be one of them. Many times, VA loans will allow a first time homebuyer with bad credit to buy a home with no money down and then benefit from historically low interest rates on their loan. If you are in active duty, in the reserves, or you are married to someone who is, this could be one of the best bad credit loans for first time home buyers.
Finally, there is a subprime mortgage option which is specifically for the first time homebuyer with bad credit. While you will be charged a higher interest rate than someone eligible to obtain a conventional home loan, at least you will be approved and get into the home you want.
As for tips for qualifying for first time home loans, you should try to reduce your monthly expenditures before you look for bad credit home loans because this will help you better afford your new mortgage payments. Also, getting pre-approved for FHA loans, VA home loans, or your subprime mortgage will allow you to get ahead of the game when bidding on home purchase prices. Hopefully, these tips for 1st time home buyers, along with knowledge about various loans for first time home buyers, will get you where you need to go. If you have any questions or concerns please contact out mortgage lenders who understand program parameters for a first time home buyer with bad credit.