First time home buyers (FTB) are those who are buying their first house, or those who haven’t owned a house in three years prior to submitting a loan application. When you are a first time home buyer, your choice of loan will be determined by several common factors:
Most first time home buyers do not stay in the same house for more than three to five years. Most of them will outgrow their first house as they settle and their family start to grow, as they get higher up in their careers, the higher income will allow the buyers to get into a larger house, etc. One way or another, most FTB’s will benefit from lower rates offered by shorter term hybrid adjustable loans, especially Interest-Only loans. 3-2-1 Buy-down loans allow you to get into the house with a much lower payment in the first year, which starts rising in the next two years as your income increases as well. And then there is an FHA option, that allows you to get prime rate loan up to 103% of the purchase price even if your credit scores are rather low. The disadvantage of FHA loans is the Private Mortgage Requirement that comes with the loan.
BEST LOAN CHOICES:
3 to 5 year Fixed ARM loans, including Interest Only, 3-2-1 Buy-down loans, FHA 100% loans.