Getting the ball rolling with purchasing your first home is both incredibly exciting and stressful. To get you set out on the right path, we’re going to introduce you to 5 of the best programs for first-time buyers in Baltimore:
Let’s start with one of the more common types of first-time homebuyer lending: the FHA loan.
An FHA loan is a specific type of loan you can get exclusively through a mortgage lender qualified and approved by the United States Federal Housing Administration. FHA loans are built for first-time homebuyers, requiring a maximum of 3.5% down with a credit score of 580. If your credit score falls below that, a higher down payment will be required of you, up to a new maximum of 10% down.
These lowered down payment and credit score conditions help younger first-time buyers in Baltimore cross the threshold into loan approval, and on the road to get their independent domestic life kick-started.
A USDA loan is similar to an FHA loan in that it is backed by a department of the federal government, but this time that department is the United States Department of Agriculture.
USDA loans are designed to help fund and improve rural and suburban areas of the United States. It’s very uncommon to qualify for a USDA loan in a large, metropolitan area, but it’s always worth looking into any possibility local to your chosen destination and its surrounding area.
USDA loans require no money down, have very low credit score requirements, and then focus on household income to determine your level of loan qualification. These income guidelines vary by locale, so it’s a good idea to do some research through the USDA website prior to applying.
If you’re a U.S. military service member or veteran, you likely qualify for a generous loan through the United States Department of Veterans Affairs.
Like the FHA and USDA loans, VA loans are acquired through an approved private lender. VA loans require no money down, have incredibly low-interest rates, and do not require Private Mortgage Insurance at any point throughout the lifetime of the loan.
If you qualify for a VA loan, it’s likely that it will always be your best option for mortgage financing.
Take care when selecting your mortgage lender when applying for a VA loan. With the uptick in service members since the early 2000s, quite a few less reputable organizations have popped up attempting to appear as VA-approved lenders to lure in first-time buyers in Baltimore. To get more information on VA loans, contact your local VA office, or visit va.gov.
Another financing route to take as a first time homebuyer is to apply for a renovation loan.
This normally happens if you’re looking to purchase a distressed or foreclosed property that is in need of substantial revitalization. Renovation loans are structured to loan you the amount for the purchase of the property along with an amount to accomplish any agreed-upon repairs and updates.
This means your loan principal will be substantially higher than the agreed purchase price of the home. Keep this in mind – and budget appropriately – before signing on the dotted line.
STATE AND LOCAL PROGRAMS
Finally, most states have first-time homebuyer programs, and the details of these can be found on their individual state websites.
It’s also worth contacting your local municipality to find out if there are any first-time homebuyer benefits of which you could take advantage. It’s no use leaving money on the table when you’re about to embark on a great residential endeavor.
Help for First Time Buyers in Baltimore
Financing can be confusing for first-time buyers in Baltimore. Don’t spend your time getting frustrated – Contact us today at (410) 276-7827!