If you’re a first-time home buyer, you may be wondering what the benefits of buying a home are. Or maybe you’ve already decided that buying is right for you, but you’re still trying to decide which program would work best for your situation. Either way, In this article, we’ll cover the benefits for first time home buyers.
A first-time homebuyer? *Defined!*
A first time home buyer is someone who has not owned a home in at least three years. For example, John and his wife just got married, so they are buying their first place together. They went to the bank and got a mortgage loan.
What benefits does the government offer first-time home buyers?
- The government will offer you a down payment assistance loan. This means that you’ll only need to pay a minimum of 5% to 10% toward your home purchase, but this number is subject to change based on location.
- You can also avoid private mortgage insurance (PMI), which is a requirement for most conventional mortgages with less than a 20% down payment.
- There are many tax credits available for first time home buyers in the US including:
- First-time home buyer’s tax credit
- Home renovation tax credit
Low interest rates.
Interest rates are a crucial part of buying a home. If you aren’t in the right interest rate range, it could seriously affect your ability to buy the home of your dreams.
Here’s how to find out what interest rates are like in your area:
- Get prequalified for a mortgage loan with a lender who can review and approve loans based on current market conditions. This will give you an idea as to how much money you need to borrow and at what rate.
- Find a mortgage broker who specializes in high-risk borrowers such as first-time home buyers or immigrants with limited credit histories (or both!). Your broker should be able to help you obtain financing for any type of property purchase, including FHA loans or second mortgages from banks like Wells Fargo or Chase Bank
Down payment assistance.
The government offers several programs that can help first-time home buyers with the down payment. The most common is FHA mortgage insurance, which is paid for by the seller of a home. Other programs include:
- VA mortgage loans, which cover up to 100% of your next home’s value.
- USDA Rural Development loans, guarantee to finance rural properties.
Other government programs that may be available include:
- Down Payment Assistance (DPA) from your state or county governments; and
- Low Income Housing Tax Credits (LIHTCs).
Lower credit score requirements.
Real estate homebuyers may be surprised to learn that they are not limited to the same mortgage options as other borrowers. Many lenders offer financing options for first-time buyers with credit scores as low as 620, and they may also be eligible for lower down payments and interest rates.
In addition to having a lower credit score requirement, first-time homeowners will also benefit by taking advantage of government programs such as the Federal Housing Administration’s 203(k) loan program and Fannie Mae’s HomeReady mortgage program. These programs can help you afford more homes than you thought possible because they allow for down payments as low as 3%.
No private mortgage insurance (PMI) requirement.
If you are buying a house that costs less than $500,000 and has a 20% down payment, PMI is not required. However, if your loan amount is greater than 80% of the home’s value, then private mortgage insurance may be required to protect the lender in case of default.
There are many benefits for first time home buyers, especially if you take advantage of the programs in your area.
When you buy your first home, there are many benefits that can help you get into the real estate business. Some of these benefits are different depending on which province you live in. They offer grants for down payments and closing costs for new homes, while others only offer grants for existing homes.
These provinces also have programs that let you use your loan guarantees to purchase condos or townhouses instead of single family homes.
Are you a first-time home buyer?! #ProTip.
For those who have never owned a house before, this is where you’ll find all the information you need to know about buying your first home. From what to look for in a mortgage broker, to how much house you can afford, this guide will help you get into the market as quickly and easily as possible.
We hope this article has helped make the first-time home buying process a little less overwhelming. If you’re ready to buy a property, it’s time to start looking! There are many resources available online that can help guide you through the process, including our own blog which has lots of great information about buying your first house.