First time buyer loans are rather straightfoward–they are for persons who are buying a home for the first time. Equity loans, on the other hand, are loans that are issued to borrowers who already own a home. The equity of the home is put up as collateral against the loan, meaning that if the buyer fails to meet expected payments, then he is at risk of losing his home.

Thus, first time buyer loans are different, since the borrower may not have collateral, such as a home to put on the burner, which is why the lender will consider the value of the home for purchase and use it in the equation to determine if the borrower is qualified for the loan. In other words, if the home purchased has equal equity to the mortgage loan, then the lender most likely will offer the loan.

If the equity on the home for purchase is below the loan amount, then the lender may require a

steeper upfront payment in addition to higher interest rates. The lender may also include guarantees in the contract, meaning that the buyer will agree to certain stipulations, including paying off penalties.

Thus, first time buyer loans are loans offered against potential equity. The house for purchase is the collateral against the loan. The lender will often repossess the home if the buyer fails to make payments.

Therefore, before agreeing to any contract involving large sums of cash, borrowers are
wise to read all details involved in the transition. Few other loans are available for first time buyers.

There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain.

 


 

To apply for a first time home buyer loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders.  For a No- Obligation Quote Click Here