First Time Home Buyer BEST MORTGAGE DEALS When Buying a House | First Time Home Buyer Loan Programs

What is the best loan program for a first-time
homebuyer? How's it going everyone, Matt Leighton welcome
back to another video. In this video we're going to go over the best
loan program for a first-time homebuyer. I'm here with Sean Glennon. Sean, take it away, what's the best program
for a first-time homebuyer? Well, beauty is in the eye of the beholder. So it depends. Now there's a lot of first-time homebuyer
popular loan programs and it really depends on what you're capabilities are in terms of
downpayment, whether or not you have gift funds to use toward the downpayment or closing
costs, what your income limit is, that's a big one.

How many people are going to be on the loan,
because a lot of these first-time homebuyer loans, what the big difference is between
them and other typical loan products is that there are restrictions. They don't want to be given 100% financing
products to people who aren't making a ton of money and things like that so income limits,
sales price limits, credit score limits, all that is going to be apart of these programs
but we can dive into some of the more specific. Let me ask you this, if you are a Veteran,
and also a first-time homebuyer, is it a no-brainer that the VA loan program is the best program? Yes. Absolutely. Alright so obviously if you're a Veteran,
first of all THANK YOU, and then go with the VA loan program, there is no competition.

So with that being said, let's just focus
on conventional and FHA because with FHA 3.5% down, compared to Conventional, you can go
as low as 5%? Or can you go lower than that? There's actually a new loan program you can
go lower. When we talk loan programs, the first thing
you're going to want to do is get pre-approved to determine what you're qualifications are
and what doors are opening or closing to you depending on whether you fit the bill for
certain programs. 100% financing, VA, USDA, and USDA is a rural
housing loan so if you're looking in and around cities, it really won't be applicable to you. And VA only if you're a Veteran; are going
to be your best 100% financing products. Now there are certain loan programs in each
state that usually have first-time homebuyer 100% financing needs. In Virginia, VHDA is the one that comes to
mind as the most popular.

But most people are going to fall into the
umbrella as FHA or conventional loans. FHA is going to be 3.5% down and is very friendly
on underwriting guidelines. Conventional is a little bit more strict,
but recently they actually came out with a program that is trying to compete with FHA. It's called Fannie Mae's Home Ready Program
that allows for a 3% downpayment instead of the typical 5% downpayment. Yeah a lot of times you're seeing people dive
to what's the lowest downpayment I can have? That has to be the best loan, maybe that's
right, maybe not because with FHA you do have the monthly insurance on the loan there's
another program with the conventional.

And let me ask you this, are people re-financing
out of these loans? For instance, I had a client a couple weeks
ago they went in with a VHDA loan which is Virginia-specific, so if you're not in Virginia,
you may not be aware, but they went in with that and I don't know a week later or whatever
the minimum time is that you can re-finance, they said oh yeah, that's what we're going
to do. Are you seeing this? Or is this kind of a unique situation? No, I've seen a lot of it.

What a typical game plan is for a lot of people
is, a disclaimer that you can't always bank on re-financing because you never know where
rates are headed. But as long as rates stay solid or at least
in the range that we've seen them right now, or around where you originally purchased your
home, it's very common for people to bite the bullet and get the VHDA or FHA loan which
carries with it a little more in fees and mortgag insurance and things like that. But it allows them to get in the property
with very little out-of-pocket and then once they get a little equity in the property or
save up a little money, they try to re-finance into a conventional loan to eliminate some
of that burden with the mortgage insurance and things like that. Get themselves a much more healthy and manageable
monthly payment. Yeah the VHDA loan program is becoming more
popular here in Virginia but sometimes with these loan programs it's really hard to get
into, you have to be making $82k – $85k, be born in a certain ZIP code, and be left handed
and live on Main Street or something like that where it's like it shouldn't have to
be that hard.

Quickly go over maybe a broad overview of
what it takes to be eligible for a certain grant program like the VHDA. Well some of these grant programs, most of
them are all going to have income limits. So that's the big one. If you're making $250,000, there's a good
chance you're not going to qualify for the local first-time homebuyer and grant programs. Income limits, sales price limits, heightened
credit score minimums. When they're giving out 100% financing, that's
a high-risk loan so they want to give it to borrowers that are well qualified. There are a lot of niche things that go along
with it and the grant program..VHDA is a little more broad, but county and local grant programs
even more, very niche, sometimes you're in a lottery with others. It's a nice thing to have in your back pocket
but nothing I would recommend anyone bank on. Good to know. So we're going to wrap this video up with
one final question. But you know obviously this is more Virginia-centered,
there's VHDA loan program, in your own state, there might be other grants available.

So maybe FHA is right for you or maybe talk
to your lender and find out the grants available. Sean my question is, if you were to imagine
your last 100 first-time homebuyers, out of those 100, what's the most popular loan program
that you're seeing for first-time homebuyers? I would say if you had asked me for any year
in the last 8 or 9 years I've been in the business, the answer would be FHA. I would say since Fannie Mae last year rolled
out there Home Ready Program with 3% down, most homebuyers do qualify for it and fall
within the income limit. The area median income limit, you can actually
look it up on Fannie Mae's website. As long as you fall under that, you qualify
for, it does give a little more beneficial terms on the mortgage insurance terms, it's
a half percent lower on downpayment, and there's a little more flexibility with some of the
things that you can do down the line with the loan like remove the mortgage insurance.

I would say FHA, historically, Fannie Mae
Home Ready Program recently. Things are changing. So FHA for the longest time was the best option
out there, it may still be the best option depending on your circumstance, but you may
know the best option, but your lender will know the best option. Be sure you're talking with local lenders
out there and know all your options because a lot of things are changing in terms of guidelines,
what I'll do is link and list a video up here in the corner that talks about recent changes
in the market place that may affect which loan program that you being available to get
into and get a loan. You got it out. T-t-t-t-today Junior. What movie is that from? Billy Madison. Well on that note Sean, why don't you tell
the people where they can connect with you. You can email me at sglennon@hstmortgage.com
or call the office.

Myself or anyone else in The Glennon Group
will be happy to answer your call and help you with any questions. 703-766-4630. And my man Matt will hook it up down loan. Thank you very much for watching. Until next time, create a productive day. Take care..

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