Buying a first home can be both exciting and scary. Many are not able to do this on their own. Fortunately, there are first-time home buyer programs that help people make the adjustment. While you may be able to purchase a home with a traditional loan, consider the benefits that first-time home buyer programs offer.
Low or No Down Payment
The down payment is often the biggest hurdles when it comes to buying a home. While you may be able to make monthly payments, coming up with a 20 percent down payment may make a home purchase out of reach. Through a Federal Housing Administration (FHA) loan for first-time home buyers, you can secure a loan with as little as 3 percent down. If you're a veteran, you may qualify for a loan with no down payment.
Down Payment Assistance
Some first-time home buyer programs also offer down payment assistance. In this case, you would take out a second loan to cover the cost of the down payment. This will typically have a higher interest amount than the main mortgage, but it can allow you to purchase a home.
Loan programs for first-time home buyers aim to make purchasing a home affordable. One of the ways that they do this is by offering low interest rates on the home. A lower interest rate means lower monthly payments.
Some first-time home buyer programs offer—or even require—financial counseling. This will help you make a wise decision when purchasing your home and ensure that you understand all of your financing options. It can also help you to determine the true cost of the home and whether you can really afford it.