Most homeowners depend on mortgage loans and mortgage assistance programs to purchase a home. However, these programs are confusing as it is challenging to know who qualifies as a first-time home buyer and who is not. Let’s dive into it for better understanding.
What is a First-time Homebuyer?
This is a term used to refer to someone who is buying their first home ever or someone who doesn’t own a home and hasn’t purchased a home in several years. These homebuyers can sometimes qualify for first time home buyer benefits, including lower down payment requirements and reduced mortgage insurance premiums, sponsored by the federal, state and local governments.So Who Qualifies as a First-time Homebuyer?
Under most programs, a person who qualifies as a first-time homebuyer has not owned a house or home in their lifetime. This is confusing because sometimes those who haven’t owned a home for more than three years can still come into the market and be eligible for the benefits. Check with your local mortgage expert at Spire Financial on what programs are available and what the specific guidelines are. State and local governments sometimes have online resources you can use to research as well.What are the Barriers to Owning a Home?
The significant barriers to homeownership are access to credit, affordable housing, and down payments. The affordability for buying a home for the average income family has reduced, and it is now expensive to acquire a home. This is the reason the first time home buyer programs and state down payment assistance programs exist.First Time Home Buyer Assistance
Anyone looking to see if they possibly qualify for down payment or first time home buyer assistance programs should do their research on local programs online and with the help of a licensed local mortgage expert. In some areas, there can be several different programs available.A. FHA Mortgages (federal housing administration)
This loan is insured by the federal housing administration. An FHA home loan allows borrowers a loan with a lower down payment requirement and credit guidelines that may be easier to qualify for as compared to conventional mortgages. One thing to remember with FHA home loans is the addition of upfront mortgage insurance and annual mortgage insurance possibly for the life of the loan.B. VA Loans
These loans are available for qualified veterans and active military members. VA borrowers can borrow up to 100% of the lower of the purchase price or appraised value of the home with no mortgage insurance. VA loan funding fees can be different for each borrower depending on how many times the benefit has been used and the VA disability status of the borrower. Also, it is possible for a VA borrower to have multiple VA loans if there are extenuating circumstances causing relocation. VA jumbo loans are also available to qualifying VA borrowers.C. USDA Loans
USDA loans are for homebuyers in designated rural areas. These loans also offer low to sometimes no downpayment. Borrowers must be below the max income guidelines for their family size as designated in their area.Conclusion
With the several home buying assistance programs, it can be confusing to tell who is eligible to be a first-time homebuyer. Your local mortgage expert at Spire Financial can help you discover your options and find the best loan for you and your family.Latest Articles
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