Can you get qualified? Even without a substantial down payment saved, you’ll find there are programs—such as the FHA loan program—that make it possible for you to become a first-time home buyer.
Make Your First Home Purchase Your Best-Ever Decision
Take advantage of interest rates. There’s no guarantee that interest rates are going to be this low forever. By getting out of the renter’s game and locking in low interest rates, you can begin a lifelong journey of wealth building.
Use less money down than you imagined. The concept of saving up 20% for money down against a loan can scare some first-time home buyers. But we’ll explain why that doesn’t always have to apply to you.
What You Need to Know About First-Time Home Buying
According to some statistics, a majority of renters who want to buy a home don’t move forward because they’re afraid they don’t qualify! But there are plenty of programs that make it viable for lots of people—even those with poor credit—to qualify.
For many first-time home buyers, the main issue is coming up with the down payment. Many of those who would otherwise buy a home feel they would move their purchase timeline forward if they could make the down payment.
With some first-time home buyers’ terms, it’s possible to pay with a relatively small down payment, much smaller than the usually-expected 20%.
Home sales are as hot as ever, with available homes sometimes going off the market in as little as three weeks in some areas—or even less.
Find favorable terms. When you approach it the right way, your first home purchase can be a door to great terms that help you with your monthly budget.
2 Ways to Use Your FHA 203(k) Loan
Buy a Fixer-Upper (and Fix It Up)
Or... Renovate Your Current Home!
The team at Philadelphia Mortgage Brokers are polite, prompt, and professional. I've recently partnered with Evan and he can assist you through your mortgage process with the highest level of quality.- Michael R.
Once again, The Philadelphia Mortgage Company has proven to be the absolute best mortgage company. Their team of professionals are extremely knowledgeable and totally dedication to customer service. This was the perfect customer experience! They make you feel as if you were family. Note to my fellow Veterans… This company truly will get you the best VA rate possible.- Jay C.
Paul and his team at Philadelphia Mortgage Brokers are exceptionally professional and effective at getting the best deals possible for their clients. Paul handled two refis for me, and the process couldn’t have gone smoother. Highly recommend!- Eric A.
I highly recommend Philadelphia Mortgage Brokers services. My spouse and I refinanced our home and PMB were extremely professional, efficient and knowledgeable explaining every detail clearly and concisely. PMB made the process effortless and I am very grateful we chose PMB to refinance our home- Lynne B.
I would highly recommend Philadelphia Mortgage Brokers. They recently assisted me in purchasing a home in NJ. Paul Carson, Andy Stahl and their processing team were all great. Personable and professional. They all worked closely with me to ensure the process was smooth and successful. They are military friendly and knowledgeable with VA loans which was important to me. The team was always available to answer all my questions and made sure I wasn't missing anything. They also provided me with great referrals for various homeowner needs. I would not be in my lovely new home without this team. 5 out of 5 stars!!!- Ann T.
They were great to work with and we got a really good rate. Very happy. Start to finish was less than 2 weeks.- Sharon A.
I've done a couple of new and refinance mortgages with Paul and team, and they have always been great to work with. I trust they know the market, are looking out for my interests, and are on top of any issues that may come up. The rate and terms on this loan option they found made it a no-brainer, and getting it done was an absolute breeze from application to closing.- Andy H.
Excellent experience; Paul and his team were in touch with us thorough out the process. They answered every possible question we had. They were instrumental in helping us purchase our home; since this is a fast moving market, we had to submit offers fast, and they were able to respond quickly.- Misael P.
We had a great experience with Eric! He was easy to work with, found us the best rate quickly and guided us through the whole process. We even started our journey late on a Friday afternoon early evening and he was accessible and dedicated a great amount of time to us in helping us figure out what to do! Would highly recommend this team to anyone!- Jessica L.
Your Renovation Wish List Could Include...
Increase window size
Bring in more natural light
Finish a basement or attic
Create a mother-in-law apartment or guest space
Correct foundational issues
Protect your investment for the long-term
Add a detached garage when one does not exist
There’s room for everyone
Knock down walls
Open up the floor plan to create versatile, welcoming spaces
Flood-proof your property
Add a retaining wall to prevent expensive damage
Repair the pool
Tired of leaks and cracks? Fix the pool & start enjoying it
Expand or refresh the kitchen
Cooking is just more fun in an updated kitchen
Add square footage
Growing your family? Grow your home alongside it!
How Does a Renovation Loan Work?
Depending on the types of repairs you plan to do, you have two options when it comes to securing a FHA 203(k) Renovation Loan: Limited and Standard.
The Limited 203(k) loan
The Limited 203(k) loan is for non-structural or “cosmetic” repairs. It covers up to $35,000 in renovation costs. With a Limited loan, you can do nearly anything that doesn’t affect the home’s structure! Think kitchen and bathroom remodels, carpet and flooring replacement, painting, appliance replacement, and much more.
The Standard 203(k) loan
The Standard 203(k) loan is a loan for projects with repair costs over $35,000. It can be used for structural or non-structural repairs. With a Standard Loan, you have even more flexibility. You can expand the home’s footprint, improve accessibility for differently abled people, and even move the home to a different site.
What Do First-Time Home Buyers Need to Know About Buying a Home?
Why should I buy a home now and not rent until I can save up a massive down payment?
Because there are plenty of options for lowering your down payment! For example, the FHA loan program, which includes loans insured by the Federal Housing Administration, is great for people with low credit scores and not a lot saved for a down payment. That isn’t to say that you shouldn’t save for a down payment—but remain open to all of the options available.
How will I afford my home?
Pre-approval for a first-time home buyer can be a major step in the process, and it’s easier than you think. A pre-approval is essentially a (conditional) promise from a lender that they can offer you the mortgage terms you need to make an offer on a house. This requires an application process that’s much simpler than you might imagine—and great for first-time home buyers who want to shop around and demonstrate to a seller that they’re serious about their offer.
Should I save for a down payment?
Absolutely. Just because you don’t necessarily have to make a 20% down payment on your first home doesn’t mean that you should eschew the process completely. Having a substantial down payment saved never hurts.
I have a low credit score. What kinds of loan programs are there for me?
If you go through the application process and make sure that your payment is in line with what you can fit within your budget (the typical recommendation is a mortgage that takes up no more than 25-33% of your household budget), then you’ll find it’s possible to afford your first home—and the process may be much simpler than you imagined
How do I get pre-approved?
In addition to the FHA loan program as mentioned in the previous answer, you should also look at your qualification for: the VA loan program, the USDA loan program, and even the Good Neighbor Next Door buyer aid program.
What should I do next?
Simple. Click any of our buttons above and find out if your first time home purchase can be as easy as we say it is here. Don’t worry about a low credit score, either—you’ll find that there are plenty of programs out there that can help.