First of all, congratulations on your decision to purchase your first home! You’ve saved up some money, and you are moving out of your rental and into your first house. This is such an exciting time for you, the first-time home buyer, and it can also be a confusing time when you think about the many home buying steps on your list.

One of the steps of the first-time home buying process that you’ll probably have a lot of questions about is getting your first home mortgage. The mortgage you pick might also determine what type of home you can buy and where.

So, let’s break down some of the types of home mortgages first-time homeowners tend to qualify for.

5 First-Time Homeowner Mortgage Options

Did you know there is more than one type of home mortgage loan? You have probably heard of Fannie Mae and the FHA loan program before, but this might be where your references to the loan programs end. I am here to tell you there are many options available for you to consider when buying your first home.

1. FHA Loan – Backed through the federal government. Often used by first-time homeowners without home equity yet or with lower credit scores. This type of loan is possible to secure with a minimum percentage down; at the time of publishing, it is about 3.5% down. The fees for this type of loan might be higher than some other home loan types, and as of now, your mortgage insurance will always continue with this type of loan.
2. VA Loan – This is a great option for military service personnel. It is a great option, but it might not be a fast process. So, reach out early to learn if you qualify for this loan type.
3. USDA Loan – A rural property loan. You might not have ever heard of a loan through the USDA. It’s not talked about a lot, but it might work for you if you are considering a rural location for your new home. You don’t necessarily need to be purchasing a farm, just a home in a rural location. It has a variety of options if you have a lower credit score, can’t put a lot of money down, and are a US citizen or permanent resident. Final determination of your eligibility would need to be approved as with any loan, but as a first-time homeowner for a rural property, this might be a great option. To learn if your location is part of the eligibility locations check out this page at the USDA.gov Website.
4. Conventional Loans – This loan is now a great option for first-time homebuyers with just 3% down, and with the option to skip your mortgage insurance in certain situations. The conventional loan is a fixed interest rate home mortgage loan, so your interest will stay the same for the life of the loan. Also, the purchase price needs to be under $484,350. Again, there are a number of other particulars to qualify for this type of loan, but it certainly can be a great option for first-time homebuyers.
5. State Home Buyer Program – Many states offer home loan options for their residents if they are higher risk customers. It can be a great way to get into a home and start accumulating equity. They vary by state so it’s best to start at the Government HUD Website and search by your particular state that you will be buying your home in.

These are some of the top types of home loans you can consider when you are buying your first home. You don’t need to feel overwhelmed or confused. As you do your research to find the perfect home loan for your situation you can start to narrow down the options that are best for you.

Your Knowledgeable Memphis Real Estate Agent

When you are ready to sell your current home or buy a new one, look to a top-rated and experienced real estate agent. An agent that is familiar with the locations and types of properties you love in the Memphis area. Whether it’s residential, or open or rural land you’re looking for, work with a real estate professional that you can trust.

Click here to learn more about me and how I can help you with your home purchase, buying parcels of land, or looking to move to a new home. My skills and education are focused on what you need for a great real estate experience. I would love to chat with you and answer any questions you might have. I can also help put you in touch with some great home mortgage groups so you can review your first time home buying options! Contact me at (901) 828-8919 or drop me a quick note angie@angiekelley.com. Looking forward to speaking with you today!

Angie Kelley, Crye-Leike Realtors
(901) 828-8919 or (901) 840-1181