First-time home buyers are those who purchase a home for their primary residence for the first-time. To qualify as a first-time home buyer, the purchase must be the borrower’s principal residence. The maximum limit that can be distributed from IRA over the borrower’s lifetime on a penalty-free basis is $10,000. If the borrowers are a couple, each spouse has a limit of $10,000, adding up to $20,000 for a married couple. There are various loan options available to first-time home buyers:
Loan Options for First-Time Home Buyers.
These are mortgages insured by the Federal Housing Administration (FHA) that are a good alternative to conventional loans for first-time buyers. These loans feature competitive interest rates, lower down payments, and negligible closing costs. Besides this, these loans are also easy to obtain because of the low default risk for the lenders. Since these loans are backed by the FHA, lenders do not experience a loss if the borrower fails to repay the loan.
This is an assistance program offered by the US Department of Agriculture to home buyers in rural areas. What it has to offer to first-time home buyers is that they do not need to purchase and run a farm to qualify for it. There may not be a requirement for a down payment. However, USDA loans are characterized by income limitations, which differ from area to area.
These loans are backed by the US Department of Veteran affairs that help first-time and other veteran home buyers, and their surviving spouses buy, build, repair, or modify new or existing homes. While these loans come with low interest rates, no down payment requirement and are partly backed by the VA, first-time home buyers do not have to pay the private mortgage Interest or maintain good credit to get the loan.
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