First-Time Home Buyers : Are You Missing Out on Savings?
The dream of buying a home is one that many people have. Some rush into the experience head first while others tread a little more carefully. Many even hang back because of the daunting cost of a mortgage.
First-time home buyers do have options that will actually help them become homeowners. Looking at the many programs available can be extremely helpful in getting first-time home buyers into their dream home.
First-Time Home Buyers
A first-time home buyer can mean different things depending on the program that is being pursued. In the most general sense, anyone who has never purchased a home before will be considered a first-time home buyer. Although some programs allow buyers who have gone many years without making a purchase to be considered a first-time buyer. It all depends on the program guidelines that are being accessed.
Local Programs
There are many local programs that help home buyers with a small portion of down payments, with tax credits, or even closing costs. These programs can provide money towards these areas and may require buyers to participate in a program to learn about mortgages and homeownership. Besides local programs, there are a variety of national programs available as well.
Department of Housing and Urban Development
The Department of Housing and Urban Development provides a program formerly known as the Teacher Next Door program, now called the Good Neighbor Next Door, which now covers firefighters, police officers, and emergency medical workers as well. Those that qualify can have up to fifty percent taken off a home in an area that needs to be revitalized if the buyer will live in the home for a minimum of three years after their purchase.
Veterans Administration
The Veterans Administration helps veterans, their families, and active service members get a home loan. Those that qualify must meet the guidelines set by the VA. The benefit of meeting these guidelines is no longer needing a down payment for the loan and there is no minimum for a credit score.
United States Department of Agriculture
For those looking to reside in a rural area the United States Department of Agriculture is willing to help foot the bill. There are two loans the USDA will help a home buyer obtain called a guaranteed loan or a direct loan. A guaranteed loan will be provided by the government if the buyer is not making over one hundred and fifteen percent of the average income for the rural area. Anyone falling in a lower income bracket may qualify for the direct loan.
Federal Housing Administration
The Federal Housing Administration can provide a loan that allows buyers to have a down payment that is only three and a half percent. Which is major for anyone struggling to find the money to put down.
The credit score needed to qualify for this is only five hundred and eighty. Plus a home buyer can qualify if they have never purchased a home or if they have not made a purchase in the last three years.
A major problem with an FHA loan is the fact that the loan has to have mortgage insurance. This is an added cost that needs to be added on when a buyer is putting down less than twenty percent. Usually, a buyer can drop their private mortgage insurance once they have paid beyond the twenty percent mark, but with an FHA loan, they must keep it for the life of the loan.
There is no reason first-time home buyers cannot find a program to help them qualify for a mortgage. Even those that do not have a stellar credit score and have less access to a large down payment may qualify.
For those who do not mind a little research and paperwork, the national and local programs can be very helpful for getting financial assistance for homeownership.