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First Time Home Buyer in PennsylvaniaIf you are looking to buy your 1st home, you've come to
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Today’s Rates for First Time Homebuyers in Pennsylvania

Wednesday, August 16, 2017

Mortgage rates are at 4.03% for the 30 year fixed loan program and at 3.16% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 3.27%. Check out FHA and VA rates as well if you are doing low or no down payments.

Pennsylvania First Time Home Buyer Checklist

  1. Decide on your loan program options. If you're moving to an eligible area, you may qualify for a zero down payment loan through USDA. Veterans may be eligible for VA loans, which do not require cash down. The content in the paragraphs below should give you an idea of where you may fall. 
  2. Get familiar with your credit score. Your credit should fall somewhere above 600, but few lenders accept scores in the high 500s. If your credit score needs a boost, work on improving it before you try to take out a mortgage. Once annually, you're able to request a free credit report from the three major credit bureaus, Equifax, Experian or TransUnion. 
  3. Shop interest rates from different lenders in your part of Pennsylvania. Choose one who not only provides a great offer, but carries a high rating from the Better Business Bureau.
  4. Get pre-approved. Once you've picked a lender, provide income documentation with your last two pay stubs and tax returns from the past two years. 
  5. Determine a budget. You could be pre-approved for a loan amount that is bigger than you had anticipated, but do not base affordability on the sum provided. Remember - pre-approvals are not guaranteed, and only you know what you can truly afford. 
  6. Begin home shopping. Be sure to avoid making extravagant purchases, taking out new installment loans, or anything else that could weaken your financial standing. Lenders will check your accounts again before closing your loan.  

Low Down Payment Loans Through FHA

If you’re a first time home buyer without a lot to put down, a Pennsylvania FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.

  • Down payment: 3.5%
  • Minimum acceptable credit score: 580 (varies)
  • Mortgage insurance: Upfront (1.75% loan amount) and monthly
  • Property guidelines apply and are verified via home inspection

You can find additional information about FHA loans on the Pennsylvania page of the FHA website.

No Down Payment Loans Through USDA

The United States Department of Agriculture backs home loans for zero down to Pennsylvania home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's property map. Note that popular areas like Philadelphia and Pittsburgh are not eligible. 

  • Down payment: None required; financing up to 102% available depending on home appraisal
  • Minimum acceptable credit score: 620
  • Mortgage insurance: Upfront (2% loan amount) and monthly
  • Income maximums apply 

Pennsylvania Grant and Assistance Programs

The Pennsylvania Housing Finance Agency (PHFA) offers affordable financing which may be beneficial to qualifying first time home buyers. Unlike the USDA option, the PHFA does not issue restrictions on area, so Philadelphia and Pittsburgh along with other major cities are eligible. Two notable programs are the HFA Preferred Risk Sharing and HFA Preferred products; they enable participants to receive conventional financing with no or very low private mortgage insurance (PMI), respectively, thus drastically reducing their monthly payment. Borrowers must put down $1,000 out of pocket and meet income requirements. 

The option to receive down payment and closing cost assistance in conjunction with the Preferred products is available through the Keystone Advantage Assistance Loan program. For even more money-saving opportunity, the Mortgage Credit Certificate (MCC) program can be combined with down payment and closing cost assistance for eligible borrowers. The MCC tax credit reduced the federal withholding on participant pay checks, freeing up cash to be used toward their monthly payment.

Visit the PHFA official site to learn more about your eligibility and requirements

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