A Guide to First Time Home Buyer
Requirements, Programs and Grants
First-time homebuyers are eligible for several benefits that repeat buyers are not. They can become eligible for special assistance programs and loans.
However, not a majority of individuals have a thorough understanding of first-time home buyers. How do you qualify as one? What perks do you get? What special programs can you opt for?
You might think that you are not eligible for the first-time home buyer perks if you have owned a home before. But this is where many homeowners misinterpret the term.
The first-time homebuyer requirements depend on various factors, and you need to understand all of them to determine whether you qualify or not.
Many individuals are considered first-time buyers even if they have owned a house before. How? The basic rule is that you shouldn’t have owned a house in the past three years.
If you have been a house owner in the past but are not at present, don’t keep first-time buyers’ programs out of your list. Possibly, you might be eligible.
Read this brief guide to learn about the basic requirements of first-time buyers and programs they are eligible for.
First-time buyer benefits
If you are purchasing a home for the first time, you are obviously a first-time buyer. But you may also be counted as one if you haven’t been the owner of a property in the last three years, as we mentioned before.
GIven you are a first-time buyer, below are the benefits you will get access to.
Down payment assistance programs
If you satisfy first-time homebuyer requirements, this is where you can score. The DPA program helps you with your extra costs- especially the closing costs and the down payments.
The requirements for down payment assistance programs may vary, but a majority of them accept individuals with moderate or even low income. Check Out The First Time Home Buyer Mortgage Programs And Loans.
Through these, you can apply for assistance in the form of a :
- Low-interest loans- Costs that you would pay along with your home loan.
- Interest-free forgivable loan-It will require no monthly payments, and your mortgage is forgiven step by step. That means you will be debt-free after a few years.
- Home buying grant- You will get a cash gift.
There are uncountable DPA programs in the US, and your country might have it too.
Most of the down payment assistance options offer you to choose the assistance you need. There are a number of programs that you may get eligible for. But not all of them provide numerous programs. Therefore, do your research and find as many options in your local DPA programs as you can. Compare them and then proceed with one.
Rules for first-time buyers and repeat buyers
The rules for every DPA program vary, and all of them have their individual rules. Some of them help all buyers, and others only offer their programs to first-time buyers. You can track whether you will qualify or not.
Mortgage requirements for first-time buyers
- Credit score- Your credit score helps the lenders to decide whether you are eligible for the loan or not. Individuals with high credit scores have high chances of getting qualified for a loan as they prove that they are capable of repaying the loan. High credit scores are the most important among first-time homebuyer requirements; they may also reduce your interest rate.
- Debt to income ratio- defines how much money you spend from your monthly income to pay the debts. These include your credit card payments, debt, housing costs, and other things like child support and alimony.
- Down payment- The more down payment you are ready to pay, the better mortgage deal you will be offered. However, a majority of home loans offer low down payments, as much as 3 to 3.5 %. Or, if you qualify for a USDA loan or VA loan, you may be eligible to pay zero down payment.
- Reliable income- To fulfill the first-time homebuyer requirements, you will also need to prove an adequate income. It should demonstrate that you can afford the mortgage along with the rest of the debts.
Get a verified lender to check your eligibility and mortgage rates. They will make sure that you can afford the house you are dreaming of.