Types Of Home Loans For First Time Buyers

If you are in the market for a home loan, there are many different options to choose from. Those who want predictability may benefit from fixed-rate loans while those who want a lower down payment can take advantage of FHA loans, VA loans and USDA loans. Let’s take a look at the pros and cons of these types of loan products.

Fixed-Rate Versus Variable Rate

A loan that comes with a fixed rate will offer the same monthly payment over the life of the loan. The interest rate on a variable mortgage will change every few years based on market conditions. Therefore, your monthly payment could go up significantly if the overall rate for mortgages goes up. However, loans with adjustable rates could be ideal if you are planning to stay in the home for five years or less.

Government Loans Versus Conventional Loans

VA, FHA and USDA loans are backed or guaranteed by the federal government. This is why you may be eligible for them with credit scores below 640 and a down payment of 0 to 3.5 percent. They are best suited for first-time buyers or those with limited incomes or credit scores. Conventional loans are best for those who want to have equity in their homes and who can afford to put 20 percent of the purchase down. By opting for a conventional loan, you can bypass mortgage insurance.

Talk to a Mortgage Broker About Your Home Loans Options

Talking with mortgage brokers in Las Vegas can help you determine what type of loan is best for your needs and budget. Once you have selected a mortgage product, a broker may be able to help with the application process or answer any questions that you may have. It may be possible to contact a broker by phone or online to start the process of getting pre-approved or pre-qualified for a home loan. (Learn how a mortgage lender determines your payment here.)