First Time Home Buyers With Bad Credit
Though not originally created for first time home buyers, the FHA home loan program may in fact be the best option for a first time buyer. FHA loans have four very attractive pieces that seem to work well for first time home buyers. First, low down payment requirements of only 3.5% of the purchase price. Many times people sell a home giving them their down payment, but of course that would not be true for a first time home buyer. Low down payment is a big plus. Second, FHA loans, called the bad credit home loan for years, allows for lower credit scores than do conventional loan programs. This is often times very helpful for the first time home buyer. Third, low interest rates. The rates that are available for FHA loan programs are just as good as conventional loans. And finally, low closing costs. The cost to close an FHA home loan can be less than other programs, and the seller can help by paying a portion or all of them for you.
Realtors are a wonderful and needed resource for first time home buyers, and anyone in the home buying process. Realtors are your advocate in the loan process, have resources to help you like home inspectors and contractors, will work to get you the best deal for you, and have access to lists of homes for sale. Should you use a realtor? You bet, and one
nice thing is that they are paid by the seller, not you the buyer.
The bank will require an appraisal, whether you are a first time home buyer or not. The bank seeks to verify that the home is worth what you are buying it for, and that is done with an appraiser that they choose. You will be charged for the appraisal as part of the cost to buy the home, so it is a fee you cannot avoid.
Having your home inspected by a licensed professional is a really good idea for the first time home buyer. The fees range from $150 – $500 normally, and is one of the better investments that you can make before buying the home. The home inspector will investigate the home top to bottom and point out any issues that may exist, this will help you in three ways. One, you need to know what to do with the house if you buy it. The inspector will provide a nice punch list for you. Two, the items that need repair give you reason to negotiate the price of the home, and you can ask the seller to fix them, or lower the price. Three, if the items are too large to overlook, you just saved yourself money and perhaps years of effort on a house that is not worth it. The home inspection is an important part of the loan process for any first time home buyer.