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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
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