Are you wondering what are the first-time homebuyer benefits? Let’s start with this point: you do not have to purchase your first home to be a first-time homebuyer. Confused? Don’t be, and don’t let a deceptive name keep you from accessing a powerful payment assistance program. This is a kind of affordable housing that helps you save thousands of bucks and realize your American dream of new homeowners. Along with urban development, owning a new home is a dream. Allow HanFincal to give you a hand to access the information about this program in order to answer the beginning questions. Find out now.
1. Do I qualify as a first-time homebuyer?
You have not owned your primary house in the last three years; you will be eligible for loans and benefits for the first-time homebuyer payment assistance.
However, many American citizens can qualify as first-time homebuyers, not just those who have never bought a home before.
Take a close look at some scenarios that you might be considered a first-time homebuyer process according to the Department of Housing and Urban Development:
- You bought a house in 2005, had sold it by 2009, and have been renting ever since. Now, you’ve decided to find and purchase a new home.
- In 2005, you and your spouse purchased a home. You divorced and sold the house in 2019, and you’re now looking to buy your complete first home on your own.
- You bought a mobile home (on wheels, not on a permanent foundation) in 2005 and continue to own it. You’re hoping to purchase a single-family home now and join a new process.
The first-time homebuyer grant program is even more lenient, providing payment assistance in specific redevelopment areas, even to repeat buyers.
Do I qualify as a first-time homebuyer?
2. First-time homebuyer benefits
Why is it important to qualify as a first-time homebuyer? Because this payment assistance helps you save money. Many benefits are available to first-time homebuyers to create favorable conditions to own your new dream home, and sometimes they often mean the difference between wishing for a new home and owning one. After all, the benefits of first-time homebuyers are to assist regular American citizens in overcoming the initial barriers to homeownership.
The two most significant benefits of first-time homebuyers are the possibility of payment assistance and more relaxed qualification requirements, including:
- Access to various loan programs, grants that will lower your interest rates, reduce the required down payments amount and closing costs when you do a home purchase process.
- The rights to get a mortgage program with low or no down payments. Some mortgage programs are Veterans Administration loans (VA loans), FHA loans, USDA loans, and Fannie Mae and Freddie Mac.
First-time homebuyer benefits
3. What are the requirements to qualify for a first-time homebuyer loan?
These types of loans are not a grant, so they still require down payments and maybe interest rates. The requirements for qualifying for a first-time homebuyer loan vary by program. Here are some mortgages, as well as the requirements and standards for each. Let’s delve a little close, check the information carefully, and find an affordable one for your process.
VA loan
- A VA loan is guaranteed by the U.S. Department of Veterans Affairs and does not require down payments.
- Members who work in the armed forces, veterans, and qualified spouses are all eligible.
- The interest rate on this type of government-backed mortgage can be significantly lower than the interest rate on others.
- The minimum credit score varies by participating lender, but most expect you to have a 640 or higher.
- Although they are generous loans, VA loans are notorious for being less appealing to sellers in a competitive real estate market.
- Long amortization (repayment) term.
FHA loan
- An FHA loan is a home loan that the Federal Housing Administration insures.
- You can put down an amount of as little as 3.5% if your credit score is at least 580.
- Depending on the local lender, you may also need to meet other requirements, such as 2 years of continuous employment and a reasonable debt-to-income (DTI) ratio.
- In the basic option, the term of this loan is either 15 years or 30 years.
USDA loan
- The USDA loan program is designed for low-income borrowers who live, work in rural areas and find a new house.
- There is no need for a down amount.
- The mortgage lender determines the minimum credit score. Most require a score of 640 or higher.
- USDA lenders can assist you in determining whether properties in your area qualify. A USDA-eligible property is unlikely to be found in a central metropolitan area.
A conventional loan
- Unlike the government-backed options listed above, a conventional loan is not insured by federal agencies such as the FHA, VA, or USDA.
- The borrower is also obliged to pay for private mortgage insurance (PMI), which is an extra fee with their monthly mortgage payments, as is the case with most traditional low-down-payment mortgage programs.
These first-time homebuyer benefits should help you fill in any gaps in your knowledge about the rights of home purchase in this payment assistance. Have you found all the answers to your questions yet? We bet you did it. Remember that you should set a goal to purchase a new home today to realize your process soon and catch the pace of urban development. HanFincal advises you that the first thing you should do is to check and improve your credit score. Depending on these scores, you may or may not receive service and advantage. For more information about your state and area, please find the complete details by contacting the Department of Housing and Urban Development (HUD), Housing Authority, and Public Housing Agency in your local.
==> Read More:
