Is this your first time buying a house? It’s an exciting time but you have plenty of things to learn to prepare for the journey ahead. The home buying process can be stressful, especially in terms of the financial aspect. Buying a home is probably the biggest expense that you will shell out in your lifetime so you have to give it thorough consideration. But did you know that there are first time home buyer benefits that you can enjoy through various government schemes and loan programs?
If you would like to take advantage of these benefits, find out how you can qualify. These perks could help you save a ton of money in the long run.
What is a first time home buyer?
A first time home buyer is anyone who has not owned their primary residence in the past three years. For example, if you lived in a rented home from 2016 to 2019, you can qualify as a first time home buyer if you apply for a loan in 2020. Even if you have previously owned a home, you can still qualify for this type of benefit. The past three years of residence is the sole basis for qualifying for this type of benefit.
The owners of the property are also qualified as one as first time home buyers. For example, a married couple decides to purchase a home together. One of them had owned a residence before while the other had rented properties for years. If they decide to purchase a home as a conjugal property, then they can still qualify as a first time home buyer in this case.
The first time home buyer assistance programs might vary from one state to another. Some are more lenient than others. Make sure you do your own research about qualifications and other guidelines in the program to ensure that you qualify
Requirements for First Time Home Buyer Benefits
There are certain requirements that should be met to qualify for this loan program and benefits. Aside from the guidelines mentioned above, one of the things that first time home buyers are curious about is the income limit. Is there an income limit to qualify for this benefit? And if yes, what is the income threshold?
The income limits required to qualify for this benefit will vary from one provider to another. The Fannie Mae and USDA loan programs are among those that impose an income limit. Some programs do not have an income limit but will require you to meet a certain debt-to-income ratio to qualify. Each program is, therefore, unique and you should do your homework and gather the requirements list necessary. It is also important to meet with a personal loan officer from your chosen mortgage provider so they can advise on which program is best for you.
What Are the Benefits?
The primary benefit you can enjoy with this type of benefits and loan program is the ability to save money. This is the intent for developing this particular loan program scheme to ensure that first time buyers can afford the purchase.
First time home buyers are often limited in terms of their choices of home to buy due to the availability of funds. The access to a limited fund can spell the difference between buying a home versus owning your dream home. With the benefits program, you can make it possible to own your dream home. Once qualified, you will have access to a wide range of loan programs, grants, and government schemes that will enable you to obtain a loan with lower interest rate. At the same time, you will be required to put in a down payment that is less than traditional housing loans. This makes it more affordable to pay for your home’s monthly amortization once you have been approved for a loan.
Loans with low or no down payment are among the most popular forms of this type of loan program. The government programs that you can take advantage of include but are not limited to the following: VA loan, FHA loan, Freddie Mac loan, Fannie Mae loan, and USDA loan. You can find a mortgage loan provider in your area and inquire about the loan programs that you qualify for.
Income limits are placed for qualified applicants to ensure that low to moderate income households have access to this assistance program.
Types of Benefits
The benefits you can enjoy as a first time home buyer will vary significantly depending on what is offered by certain programs.
One example of this is through a first time home buyer grant. This is a type of forgivable loan that is mostly accessible to low to moderate income households. To qualify for a grant, you must meet the individual requirements imposed by the program (which can vary from one location to another).
Aside from grant, down payment assistance is another form of first time home buyer benefits you can enjoy. Any home buyer knows that the down payment for the property is one of the biggest expenses that they have to shoulder. If you qualify for this assistance program, you won’t have to worry about paying the down payment. In some cases, the closing cost is also part of the assistance program (since this can be a huge expense, too). Qualifications and income limits might vary from program to program and can also determine how much assistance you can enjoy.
Start Your Home Buying Process
Once you know the qualifications and benefits of first time home buyer programs, you are ready to start your mortgage journey. How do you find first time home buyer loan programs and assistance? You can reach out to local mortgage providers in your area. Most mortgage lenders offer some type of buy loan program for first time buyers. If you are looking for loans that are tied to local or state agencies (such as FHA or VA loans), make sure to search for agency-authorized lenders.
The best way to go about that is to directly inquire with the corresponding agency in your state. Some of them can provide a list of mortgage lenders that are authorized to offer your chosen loan program.