Section 4: FHA First-Time Homebuyers
Purchasing Your First Home
Purchasing a first home is an exciting milestone in any person's life. For some, the process may also seem very intimidating. Buying a home can be challenging for a first timer. After all, there are so many steps, tasks, and requirements, and you may be anxious about making an expensive mistake. But first-time homebuyers actually enjoy some special advantages created to encourage new entrants into the real estate market. Please don't hesitate to give us a call or start your quote online.
How Much Home Can I Afford?
Typically, the first question would-be homebuyers ask themselves is, "What can I afford?" There are many factors that determine what a reasonable mortgage payment should be for an individual, including annual income, existing debt payments, down payment (if any), as well as additional costs like homeowners’ insurance and housing association fees. Orbit Home loans provides a handy VA Loan Payment Calculator to help homebuyers find a monthly payment that's comfortable for them.
FHA Loan Payment Calculator →
Contact an Orbit Home Loan Professional
What Type of Loan Should I Get?
There are many financing options available for homebuyers out there, each with their own unique advantages. For most borrowers, we at Orbit Home Loans highly recommend the working with one of our loan officers to find out what best fits your needs. Of course, if you are still researching then you can continue to explore our many loan options here on our website.
Advantages of a FHA Loan:
1. Credit
The minimum credit score for an FHA loan is 500. If your score falls between 500 and 579, you can still qualify for an FHA loan, but you'll need to make a larger down payment. Again, these are FHA guidelines — individual lenders can opt to require a higher minimum credit score. An FHA loan requires a minimum 3.5% down payment for credit scores of 580 and higher. If you can make a 10% down payment, your credit score can be in the 500 – 579 range.
2. Flexibility
Thanks to their flexibility and low rates, FHA loans are especially popular with first–time home buyers, home shoppers with low or moderate incomes, and/or lower–credit home buyers.
3. Down Payment
You have to put at least 10% down if your credit score is 500 to 579. It's a big pothole on the road to homeownership: the down payment. But Federal Housing Administration loans allow down payments as small as 3.5%. On a $300,000 home, a 3.5% down payment would cost $10,500.
4. Competitive Interest Rates
Conventional loan interest rates are typically a little higher than FHA mortgage rates. That's because FHA loans are backed by the Federal Housing Administration, which makes them less “risky” for lenders and allows for lower rates.
5. Lifetime Benefit
One of the most common misconceptions about the FHA mortgage program is that it's a one-time benefit. Borrowers who qualify for this loan can use this program over and over again, and the benefit never expires.
Getting Preapproved
The first step toward securing your loan is getting pre-approved. This involves a prequalification process, where a loan officer assesses the homebuyer's financial situation and determines what they qualify for and is followed by the homebuyer submitting a completed loan application to the lender for approval. Orbit Home Loans offers two ways to begin this process: You may either call us directly or reach start the application below to get a complementary call.
Contact an Orbit Home Loan Professional
Finding a Real Estate Agent
When using a FHA Loan, it's important to find a real estate agent that not only knows the intricacies of the FHA Benefit Program, but also understands the specific needs of borrower. Orbit Home Loans has put together a network of friendly real estate agents for just this purpose.
Learn More about Orbit Realty →
Helpful Resources
The Guide to FHA Homebuying
Browse our VA homebuyer education and resources page.
FHA Home Loan Mortgage Payment Calculator
This free VA Home Loan calculator gives you a snapshot of what your monthly payments could be with a VA Loan.
FHA Loan Glossary
Use our glossary to reference any unfamiliar terms or acronyms.
As a first-time homebuyer, you have many options when it comes to purchasing your home - including homes in high-cost areas.