First Time Home Buyers

The Good Pirates have multiple products for First Time Home Buyers. FHA or the Federal Housing dministration is the most commonly used product for First Time Homebuyers. The definition of a First Time Home Buyer is anyone who has not owned a property within the last 3 years, therefore if you sold your home or gave up ownership rights within the last three years you are considered a First Time Homebuyer.

The FHA loan only requires a 3.5% down payment and will allow the seller to pay up to 6% of the closing cost and a conventional loan requires only 3% down. Closing cost are the expenses such as insurance, title company fees, loan origination fees, lender fees, local and state taxes and appraisal cost. The FHA and Conventional loan offers fixed or adjustable rate mortgages and most products come without a prepayment. Although the FHA loan is usually a great choice for First Time Home Buyers it is not limited to First Time Home Buyers. Anyone who does not currently have an FHA loan may use the FHA program to purchase a primary residence. FHA also does not have an income limitation, however loan limits vary based on the area of purchase. Although FHA is not strict on credit scores some lenders only require a minimum of a 600 middle score for approval.

The FHA program is a government insured loan which requires the borrower to purchase an insurance policy on the mortgage in case they default on the loan. The insurance premium requires the borrower to pay a small monthly payment towards the premium and a onetime fee equal to 2.25% of the loan amount. The 2.25% is usually added to the loan and financed within the loan instead of becoming an additional closing cost. Conventional loans above 80% also require mortgage insurance that is primarliy based on your credit score and the loan amount.This insurance premium is completely different from the homeowner’s insurance policy that is required by the lender.