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  • Home > Programs > First Time Home Buyers

    Mortgage Financing For First Time Buyers

    Couple moving into their first house. Find first time home buyer loan information with AFR MortgageMost people dream about owning a home for years before it becomes a reality. It can be scary to take that leap into home ownership, but it is a wonderful feeling to not be throwing money away on rent month after month. You also have the pride in knowing you own your own home, and can truly make it yours. With most areas of the country experiencing a strong buyers market (meaning there are many more available properties for sale than potential buyers) it could be the perfect time to purchase your first home.

    Popular First Time Home Buyer Mortgages We Offer

    • Conventional Fixed Rate Mortgages - You can typically put down as little as 5% with our 30, 20, 15, and 10 year fixed rate mortgage solutions. Interest rates for these loans may be lower than what's available with lower money down solutions such as FHA loans and USDA mortgages (although that's not always the case). Borrowers who put down less than 20% on a conventional loan will likely have to pay private mortgage insurance along with their monthly mortgage obligations in the early years of their loan until they build up additional equity.

    • FHA Loans - We are a direct FHA lender offering a variety of fixed rate and adjustable rate FHA solutions. These loans require as little as 3.5% down and underwriting criteria may be slightly less stringent when compared to conventional financing methods. Seller concessions up to 6% of the purchase price may be allowed. We even have FHA loans for manufactured homes (on owned land) and 203K mortgages for properties that need renovations.

    • USDA Rural Housing Loans - One of the last remaining no money down mortgage solutions in the marketplace. USDA rural housing loans were established back in 1949 by the US Department of Agriculture to help promote development in underdeveloped areas. Eligibility is based by on the physical location of a property, among other factors. Don't let the name fool you. You'd be surprised how many areas qualify for USDA financing. Call us today to learn more.
    • VA Loans - These mortgages are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active duty military personnel, and surviving spouses. VA loans may require no money down and credit score requirements may not be as strict when compared to other financing solutions. Closing costs are typically permitted to be covered by gift funds or paid by the seller and, no private mortgage insurance is required.

    • Adjustable Rate Mortgages (ARMs)- Although not as popular as fixed rate financing solutions, there are times when an adjustable rate mortgage may make sense for a first time home buyer. For instance, someone who feels strongly that he or she will sell their home within 7 years may want to take advantage of the low introductory rate associated with a 5/1 or 7/1 ARM. Our conventional ARM programs require as little as 5% down and our FHA ARM product requires 3.5% down (subject to change - contact us for the most up-to-date requirements). First time buyers should have a solid understand of how adjustable rate mortgages work and the associated risks prior to selecting an ARM.

    Are rates higher for these programs?

    The answer to this question is yes and no. If you have 20% to put down on a conventional loan, you will likely end up with a better rate than if you but down only 5%. However, there are times when you can find FHA pricing and VA loan rates which may be better than, or comparable to, a conventional loan with 20% down. The cost of private mortgage insurance (PMI) is one of the additional costs of low money down financing. Some of the programs listed above require PMI and others, such as VA loans, do not.

    What can I afford to borrow?

    One of the most important steps towards purchasing your first home is to figure out the price range of homes to look at. This will likely be less than the amount you will be approved by a lender to borrow. Look closely at your monthly budget to see what you can afford to pay every month for housing, and at your personal savings to see what you can afford to pay initially for your earnest money, closing costs, and down payment. Your American Financial Resources loan consultant can then help you use those numbers to see what value of home you can afford.

    Your monthly housing expenses may include:

    • Principal and interest for your mortgage loan
    • Property taxes
    • Homeowners insurance
    • Utilities
    • Property owners association dues

    You will also want to retain some money in savings for upkeep of your new home. You won't be able to simply call the landlord when something isn't working once you are the owner! Some sellers offer a one year home warranty when listing their property - it is reassuring to know that if something needs to be repaired soon after moving in it will be covered. Ask your real estate agent about this option.

    Getting you pointed in the right direction.

    For those of us at American Financial Resources there is a special place in our hearts for first time home buyers. We get excited right along with them as they fulfill part of the American dream. We would be thrilled to help you take the first step towards your new home, and will be with you throughout the process. Please call us today at 800-316-9508 or Get Started Online.

    Additional Resources For First Time Home Buyers:

    Mortgage Education Center Moving Into Your First Home
    Understanding Credit Scoring What To Do Before Applying For A Mortgage
    Mortgage Application Checklist Who Is Who In A Mortgage Loan

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