Buying your first place, your first home? There can be uncertainties, nervousness, and doubts about what might be the right fit for you what kind of home loan will suit your needs.

Fortunately, there are first home buyer loans with zero or low down payment options and programs that will be a benefit for you.

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How Much Do You Have?

Before jumping right into loans and mortgages, it is a smart move to assess your finances, savings, credit scores, inheritance, and such.

Assessing your credit score is an important part to guide you in the right direction of what kind of loan you’re eligible for and can apply for without any hustle.

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Type of Loans for Buying Your first Home

The next important step is to determine what kind of loan you can take and for which one you are eligible. There are three main types of home loans in the USA:

1. Conventional Fixed-Rate Loans: Buyers with High Credit Scores

Conventional loans, as the name suggests, are the most general type of home loan.
To be eligible:

• You need a good credit score.
• A low debt-to-income ratio (the ratio of total monthly payments compared to your gross monthly income).

Advantages:

• Predictable monthly principal and interest payments
• Lower interest rates
• Flexible down payment

Refinancing? The A-Z Blueprint for Stress Free Refinancing

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2. FHA Loans: For Buyers with Low Credit Scores and Limited Savings

Federal Housing Administration loans are favored among first-time homebuyers because:

• They offer lower credit score and down payment requirements.
• More adjustable lending requirements than conventional loans.

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3. VA Loans: Loan for Active Military Duty Members, Veterans, and Their Spouses

Veterans Affairs (VA) Loans are funded by the Department of Veterans Affairs.
Who is eligible:

• Active members serving the country
• Veterans
• Entitled surviving spouses

Benefits:

• Little or no down payment
• No mortgage insurance (VA guarantees a part of the loan)

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4. USDA Loans: Loans for Buyers with Lower to Moderate Income Eligible in Rural Areas

USDA loans are backed by the U.S. Department of Agriculture.

Why it’s a good choice:

• No down payment
• Low interest rates
• Adjustable credit requirements

Eligibility:

• Property must be your primary home in a rural community with a population under 35,000.
• Rental properties and vacation homes are not eligible.

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Getting a Quote from at Least 3–4 Mortgage Lenders for first Home

Figuring out the right type of loan is only one step in buying your dream home.

A common mistake first-time buyers make is getting just one quote.
Pro tip:

• Always consult more than one lender.
• Compare at least 3–4 mortgage quotes before deciding.

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Finalising Your First Home

This step is a combination of a number of small actions:

1. Finding a Real Estate Agent

While online tools and websites are helpful, getting an experienced real estate agent:

• Knows the region
• Acts as a mediator
• Helps fulfill your requirement list

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2. Start the Search

• Your real estate agent will search with professionalism.
• Meanwhile, you should also carry out your own search and share findings.

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3. Make an Offer

Once you find the perfect First home:

• Discuss must-haves like repair costs, roofing, lead, or mold presence with your agent.
• Then, make an offer.

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4. Applying for a Mortgage for your First Home

After your offer is accepted, apply for a mortgage based on your eligibility.

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5. Getting Your First Home Inspected

After loan approval:

• Hire a home inspector
• Check plumbing, roofing, electrical, etc.

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6. Insurance for Your First Home & Finalize Your Move

• Home insurance is mandatory and required by lenders.
• Get quotes from multiple insurance providers.
• Compare and choose the best one.

Finally:

• Finalize your moving date.
• Sign all remaining documents.

Voila! You own your first home and are ready to move in.

Second Home Investment: Ultimate Smart Choice or Expensive Hustle?

FAQs

How to determine how much house I can afford?

To figure out how much house you can afford, assess your:

• Income
• Debt
• Expenses

You can use home affordability calculators available online and on bank websites.

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What is the $10,000 first-time homebuyer grant in PA?

The Philly First Home Program provides first-time homebuyers:

• Assistance up to $10,000 or
• 6% of the purchase price (whichever is lower)

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How much do I need to make to buy a house in the USA?

According to a recent Bankrate report:

• Homebuyers now need annual earnings of at least $116,960 to buy a median-priced home.
• That’s up from $78,236 required in 2020.