There Are Many Financing Programs For First-time Home Buyers

Dec. 30, 2009 - PRLog -- There are numerous financing options for potential first-time home buyers. Traditional banking institutions are limited to the number of financing avenues for people, who wish to be first-time home buyers. They still have many strict guidelines they must adhere to and excludes many deserving individuals from purchasing a home.

“I have recommended Precision Funding to all of my potential home buyers,” said Steve Tavenner of Pillar Property Group. Precision Funding can explain the various options for the first-time home buyer, who is unsure how to navigate the fiscal language of financing a home.

“There are many different avenues I can examine for the first-time home buyers who wish to purchase their first home,” said TJ Noye of Precision Funding. There are many funding solutions for first-time home buyers than ever before, according to Noye.  

USDA Loan Program

The USDA loan program is an option for those looking for 100 percent financing. The USDA program will finance 100 percent of the amount need to purchase your home minus the closing costs needed for the sale. The good news is the closing costs can be paid for by the seller of the property.

The closing costs allowed to be paid by the seller can not exceed 6 percent of the sale rice. “If you have a property that is selling for $100,000, the seller can contribute or pay the closing costs in the amount of $6,000. If the closing costs are $6,500, you will have to bring to the table $500 dollars of your own money,” said Noye.

The USDA lending program offers a very competitive rate of interest typically in or around the low 5s. The downside to the program would be the limits they put on the household income and the house you choose to buy must qualify. If your income is low enough, you will qualify for lower interest rates and an unlimited amount of seller help on closing costs.

“As far as your credit situation, it is a lengthy process and is best done with conversation on the phone or a visit with a licensed banker,” according to Noye of Precision Funding.

FHA Program

FHA program is another good option and is an insured loan. With this option, you will be able to receive financing in the amount of 96.5% of the purchase price. “Like in our previous example, you will receive financing in the amount of $96,500 on the same property selling for $100,000. The remaining $3,500 will be your remaining down payment. Again like the USDA program, you will be able to have the seller pay for up to 6 percent of the closing costs that you gain from the sale,” said Noye. FHA also ensures affordability by supplying lower interest rates. The rates are currently fixed in the low 5s.
Lease/purchase agreements

A lease purchase allows you to rent and occupy the home while having a contract to purchase the property for a set amount at a preset time in the future. There are two documents involved: a lease or rental agreement, and a purchase contract to buy the property at a later date. Lease purchase agreements vary from transaction to transaction, so there is not one standard form of contract. Typically, part of each rental payment is put aside for the purpose of accumulating funds to pay the down payment and closing costs.

“These are only a few popular options we offer at Precision Funding. We look at the uniqueness of the potential home buyer as well as explore other potential avenues for them,” Noye said.

Today’s home buyers are no longer restricted to the lending options provided by conventional banks.  Property Investment companies such as Pillar Property Group and lenders such as Precision Funding are working together for individuals who desire to own their own home.