When buying a home for the first time, it’s important to understand your mortgage options and what you may qualify for. We’ve already covered the different credit score and down payment requirements for a variety of loan programs. Let’s take a deeper dive into one of the most popular choices, Conventional loans, specifically for first-time buyers.
What is a Conventional Loan
A Conventional loan is a type of mortgage that isn’t insured by the government, unlike FHA or VA loans. These are loans that are purchased by Government Sponsored Entities, Fannie Mae and Freddie Mac, and are only available through private lenders. Oftentimes Conventional mortgages may offer more flexibility and competitive rates, especially for those with stronger credit scores.
Why First-Time Buyers May Choose a Conventional Loan?
One of the biggest advantages of Conventional loans for first-time homebuyers is its lower down payment. While it traditionally requires at least 5% down payment, for first-time homebuyers, however, only 3% down is required. This may be ideal for eligible buyers who have a stronger credit score but do not want to pay a lot up front or use up their savings. It’s important to note that a credit score of 620 is required.
Thanks to mortgage options like this designed for first-time homebuyers, homeownership may be more accessible in communities across the country.
Other First-Time Homebuyer Options
For first-time buyers who may not qualify for the Conventional 3% down payment mortgage, there are alternative financing programs available:
- FHA Loans. Insured by the Federal Housing Administration, FHA loans typically have more flexible credit and income requirements. These loans also allow for a down payment as low as 3.5%. This makes them an attractive choice to help people get their foot in the door to owning their first home.
- Down Payment Assistance. There are many local and state programs that offer down payment assistance options, especially targeting first-time homebuyers and lower-income borrowers. For example, the Texas State Affordable Housing Corporation offers a grant or deferred forgivable second loan for eligible buyers to use toward their down payment.
Whether you qualify for a first-time homebuyer 3% down Conventional mortgage or are interested in FHA or down payment assistance, contact Supreme Lending today! With our variety of loan programs, see how we may guide you through your options and on your way to homeownership.
Contact our team today to get pre-qualified and find out which option may be right for you! Click here or call our branch directly at (817) 741-7591.