What are the best loans available to first time home buyers now?
This will depend on how much the buyer has for down payment but I would have to say FHA is leading the pack. Currently FHA allows 3.5% of purchase price for a down payment, which can be a gift from a blood relative and the money does not need to be seasoned (transferred and sitting in the buyers account for a minimum of 60 days) as it does on a conventional loan. Conventional loans may offer a slightly better rate but require 5% down compared to FHA’s 3.5%. In addition to needing less money for a down payment, FHA is more forgiving on a buyer’s credit then conventional. If a buyer’s credit score is less than 740, conventional rates can start getting very expensive. FHA will finance a buyer with a credit score of 600 and will not adjust the rate to reflect risk unlike conventional financing. The other popular loan for a first time buyer or anyone looking to purchase a home that needs a little TLC is FHA’s minor repair remodel loan. This loan allows a buyer to purchase a house and add to
