First-Time Homebuyers: Loans and Credit Score

Question: Can you still get first-time homebuyer loans with no money down, even if you’re credit isn’t that great?

No Money Down Home Loans

First-time homebuyer loans in themselves are not necessarily no money down. The only loans in today’s market that have no money down, are VA Loans, which are for veterans, people who served in the military. A great thank you for their service. Then there’s what’s called a USDA Loan. This is actually guaranteed. As you can see, home loans can be quite a complicated business, which is why it is wise to be as informed as humanly possible on them at all times.

Then there’s what’s called a USDA Loan. This is actually guaranteed by the Department of Agriculture, the same people that grade our steaks. It’s really crazy. The steak people or subsidizing home loans. They require the home is in a rural area. So, there’s a lot of Polk Country that would qualify. Maybe up in Citrus County. But, you’re not going to be in Tampa city limits or near the city. There’s a map you have to follow to see if you qualify for those.

Those are the “no money downs.”

You’re Credit and Buying a Home

On the flip side, as far as the good credit/bad credit, if you’re score gets below about a 620 it’s going to be really hard to qualify for any home loan. Putting some money down can help off-set that. I tell most people to try and save up 3.5% for a down payment. That makes them eligible for an FHA Loan. On a $200,000, you’re talking about $7,000. That’s a good benchmark to have some sort of down payment.

Are you looking to purchase your first home? Learn How Much Home You Can Afford Comfortably.