For the average person considering buying their first home the realization of all the different decisions that need to be made can be overwhelming. One quickly recognizes that buying a home involves much more than finding the right place. In addition to shopping for the right home you also need to shop for the right financing and the right expert advisors as well.
The good news is that if you take enough time to research the different aspects of each phase you will not only save your money but you can even save your time and energy as well. Once you have determined the right short sale market where you invest in it is time to start your search for the right kind of financing.
There are many different types of loans that a potential homeowner can secure that can vary based on many different factors.
The Traditional Loan
These are fixed-rate mortgages that are extremely difficult to qualify for. The requirements for these types of loans are often very stringent and depend a great deal on a variety of factors including your credit score, income level, amount of down payment you have to offer and other expectations.
Fixed rate mortgages are not insured or guaranteed by the federal government and will usually require you to obtain your own mortgage insurance policy for protection. The advantages of this type of loan is the lower than usual interest rates and the fact that the interest will not fluctuate but will remain fixed throughout the lifetime of the loan. This provides the buyer with that added sense of security that can give them peace of mind.
FHA (Federal Housing Administration) loans provide a variety of different loan programs for real estate investing. They usually require a much lower down payment than the traditional loan but are much easier to obtain. These types of loans are the preferred choice for first time buyers since their credit requirements have a simpler process they must meet than other financing options.
The US Veterans Affairs office guarantees loans for veterans. It is important to understand however that the VA does not actually issue loans itself but merely serves as a guarantor to many qualified borrowers allowing them to get into the home of their choice. With the VA backing your loan application it can make it that much easier for you to find the financing option that could get you into the home of your choice.
There are many other financing options to choose from for the new homeowner so it would be well-advised to carefully shop around for the one that can fit your circumstances best. While anyone may be able to recommend a particular short sale financing option it is important to understand completely that the choice you make should be based on your own personal circumstances and not on the opinions of others.
Purchasing your first home is one of the most exciting things you can do but when you approach it with an effective strategy you can take the sting out of the stress of shopping for your first home.