While it’s true that there isn’t a “first time home buyer” mortgage out there, there are mortgages that have less strict credit score requirements and a lower minimum down payment, making them great options for a first-time buyer.
I feel it’s necessary to explain the reason why a first-time buyer would be drawn to a mortgage with a lower down payment and credit score requirement. It’s not that first-time buyers don’t have the capability to save like homeowners and they don’t generally have damaged credit because of poor financial decisions. It’s that home ownership gives a person the opportunity to build equity through their home in addition to whatever other investments they have, including a savings account. Additionally, they are (likely) making a monthly mortgage payment which helps bolster their credit score.
To answer the question, “what kind of mortgage is best for a first-time home buyer?”, isn’t simply a single statement answer. The mortgage that would be best for a first-time buyer is one that suits the buyer’s needs and one in which they meet the qualifications. What should be important to a first-time buyer is find a reputable lender whom they can trust. One who will take the time to find out what their true needs are and will guide them to the best solution for home financing. To learn more about mortgages and the process behind the financing, visit our page for first-time buyers. (You can also find information on loan products and their requirements on that same page.)