The most important thing to consider when buying a home is what type of loan is right for you. There are several types of loans available.
If you qualify for a VA loan, meaning that you are in the military or a veteran and have been honorably discharged, then this a great loan for you. The VA loan does not require any money down which can be a saving grace for many first time home buyers. The VA loan can also be used any time during the life of the veteran. However, there are some cons to this type of loan. You can only use this type of loan on one home at a time. Meaning, if you are in the position of having to take out two mortgages, you can only use the loan on one of them and will have to get a second loan out for another home. Also, VA interest rates are not the same as interest rates from traditional loans. The VA loan interest rate may be higher or lower than the traditional loan. If you are using a VA loan, you will have had to have been employed by the same company for two years and have good credit. The home you are buying also needs to meet the standards that they have in place, meaning it has to be in good condition. The VA loan will not allow co-signers so you will have to carry the loan alone.
A traditional FHA loan is a great option for nearly all the population. This loan is what most people use. With this loan you will get whatever the national rate is for interest and you will most likely be able to get a fix-rate loan. You are allowed to have a co-signer for this loan if you are unable to get the loan yourself. This is a great option for first time home buyers who parent’s have offered to help. However, you will need to bring 3.5% of the home’s cost with you to closing. For many people this posses a problem as it can be a large sum.