what are some drawbacks for...?

Question

first time home buyers programs? also, is there a credit check or do you need good or even ok credit for the program?

Answer 1

My girlfriend had to attend the class for six weeks. She had to drive twenty miles to the class, and she found out this was part of the process to see if you where willing to go to any length. They showed her ways to finance her loan, how to negotiate interest rates, selling price, down payments, etc.

She was mad at first that she had to go through all of the changes, but now she is grateful because she had her eyes open when she signed on the bottom line.

Answer 2

No real drawbacks but for the impression that you will be treated the same as a home buyer with a 20% cash down payment. As a home buyer, understand that lenders want to see some equity into the property at purchase otherwise they will charge you Private Mortgage Insurance (PMI).

As a first time home buyer, there are breaks in the rate for PMI, but you will still be paying it. Or you could depart from the first time home buyer programs and obtain an 80/20 loan. This avoids PMI but you will pay more for that 20% second loan.

Yes, there is always a credit check. There are Fannie Mae programs that will allow you to finance your new home at 100%. But if your credit is below a 660, stand by for the ole "car payment PMI." You will be able to secure a relatively low rate on your mortgage, but the PMI will be prohibitive. At that point, you will be better off in the sub-prime market.

Best of luck.