Which Loan Is Best for a First-Time Home Buyer?

posted on Sunday, March 14, 2021 in Financial Tips

Buying a house can be an exciting time, especially for first-time home buyers. It will involve a lot of planning and decision-making, but the result is fulfilling.

One of the crucial things you need to plan for is funding. If you need financial assistance, here are the different types of loans you can explore as a first-time home buyer:

Fixed-Rate Mortgage

With this type of funding, the interest rate will remain the same throughout the life of the loan. The monthly payment amount will also stay consistent during the whole term, making it easy for home buyers to plan their budget. Repayment can be typically done within 15, 20, or 30 years, but these numbers may vary depending on your service provider.

Adjustable-Rate Mortgage (ARM)

With an ARM, the interest rate is often fixed for a certain period. After that, it will continue to rise and fall monthly or yearly depending on market conditions. You can also expect your monthly payments to fluctuate along with the rates. However, it’s crucial to note that the rates and monthly payments can only increase to a set limit. Repayment for this type of loan is usually within 30 years, but terms will vary depending on your credit union.

Veteran Affairs (VA) Loan

This type of mortgage is solely granted to veterans, service members, and their surviving spouses. The Department of Veteran Affairs does not provide the loan themselves. Instead, they coordinate with private lenders like credit unions to guarantee funding for their members. The loan can be used for different purposes, such as purchasing, renovating, and refinancing a home. Moreover, it usually comes with favorable terms like zero down payments.

Make Your Dream House a Reality!

You can fulfill your dream of buying a house with the help of Community 1st Credit Union! We offer a wide selection of mortgage products for our members, such as fixed loans, adjustable-rate loans, and VA loans. Our home mortgage loan officers can help you find one that fits your individual needs. If you have questions regarding our services, please reach out to us today!