First Time Home Buyer Loans in Lakewood Colorado

Many first time home buyers come to us confused by the many first time home buyer loans in Lakewood Colorado that are available for financing their first home.

Not only that, but there is plenty of real estate industry-specific terminology to understand, which makes the home buying process intimidating to say the least. In this article, I will explain the most common first time home buyer loans in Lakewood Colorado so that you will understand the options and requirements more clearly. Please call us if you have specific questions about these programs or any other home buying terms or processes.

Colorado Home Buyer Tax Credit: This is the first program that is worth mentioning for first timers. The tax credit is not a loan, but will save you on average over $100/month off your mortgage interest, and can be used with any of the loan programs below.

FHA Loans: FHA is by far the most common first time home buyer loan option. The reason for this is that FHA has a very small down payment requirement of 3.5% (ie, $3500 on a $100,000 home), and has flexible underwriting standards (the underwriter is the person who reviews your file and says that you're approved and can get the financing). Your credit doesn't have to be spotless with FHA. Some lenders will go as low as 580 on your credit score, and just 2 years after discharge of a bankruptcy you can get an FHA loan. An added bonus is that if you need help with down payment or a co-signer, FHA allows family members to help.

VA Loans: If you are a veteran or active duty military, VA is the best home loan choice you can make. Rates are low with VA, and there is no monthly mortgage insurance. Mortgage insurance is an additional insurance policy that helps the lender in case you foreclose on your home. Every other program besides VA, with less than 20% down payment, will have mortgage insurance, which adds to your monthly payment. There is also no down payment required! To be eligible for VA financing, you must have served and been honorably discharged, or be currently active duty and in good standing. We can help you verify your eligibility quickly.

USDA Loans: USDA is another excellent option for first timers and is designated for small towns and rural areas. This program also does not have a down payment requirement, and is flexible in underwriting. Don't confuse this loan, however, with agricultural financing. USDA is meant for residential homes in rural areas, not farms.

Conventional: Conventional financing can also be used by first time home buyers, but the underwriting standards are more strict than the options I have already mentioned. If you have excellent credit and a 5% down payment, conventional is definitely worth considering.

Down payment assistance: If you need down payment and closing cost assistance, CHFA (Colorado Housing Finance Authority) is an option to consider. The program will provide a 2nd mortgage that will provide your closing costs and down payment. There are some basic requirements and you must be a first time home buyer.

Whichever way you go, a good lender can help you to figure out the best route for your situation. Be sure you are getting the best advice for YOU and not for the lender. A good lender will help you navigate through the home loan process, making First Time Home Buyer Loans in Lakewood Colorado less intimidating and confusing.

Give us a call in the office, we would be happy to answer your questions with straight, honest answers.

First Time Home Buyer Loans in Lakewood Colorado