You Can Buy Your First Home Even With a Limited Income
Buying your first home can be an exciting time, and a step towards
gaining equity in a home instead of losing money each month by paying
rent. There are many advantages to buying a home, including:
- Pride of ownership: knowing that your home is yours means that
you will take an extra interest in maintaining and decorating
it, and you will feel more a part of the community that you live
in.
- Privacy from neighbors (instead of living in a crowded apartment,
you will have your own place, and often more privacy)
- Appreciation: over time, most homes gain in value, especially
if they are maintained well. This means that you will gain equity
in your home, making it a good long-term investment
- Tax savings: often, the interest on a home mortgage is tax deductible.
As a first time home buyer, as you look into options
for buying, you may feel overwhelmed with the large variety of loan
options available, and it's easy to wonder which is the best loan
for you.
For this reason, our lenders have special mortgage programs
created for the first time home buyer. These programs
walk you through the process of applying for a home loan, as well
as the different steps in buying your home, such as
paperwork, and other items. In addition, our lenders will pre-qualify
you for your mortgage, to give you a better idea of how
much home you can realistically afford when you start hunting for
your new home.
Our lender's goal in providing this service is to make home buying
easier for you, and to help streamline the process.
Programs for the First Time Home Buyer
In addition, you should be aware that there are special programs
that provide financial assistance to the first time home buyer.
For example, a first-time home buyer often has no equity from selling
a previous home that can be used in purchasing the house, and closing
costs are frequently steep. Coming up with this money can be difficult.
Through our first time home buyer programs, you can obtain a special
no down payment and
closing cost loan when purchasing your first home.
Who Qualifies?
Eligibility criteria for assistance through a first-time home buyer's
program will vary between different locales, and is usually primarily
based on the household size and annual income, and your status as
a first time home buyer. Most of these programs are geared towards
low or moderate-income families (60-115% AMFI). If you are considered
a low or very-low income family (60% AMFI or less), then you may
receive the no down payment loan assistance.
In addition, the home that you purchase through this program must
be your principal residence (it can't be a rental property). Most programs
require that you have not owned a home within the past three years
before using their assistance.
There may be restrictions on the appraised value of the home covered
by the assistance program, and it will be required to pass a safety
inspection. Finally, some programs limit the locale that the home
can be located in (for instance, a city-sponsored program may specify
that the home must be located within that city's limits).
Once you find a home that meets the criteria for the first-time
buyers assistance, you then select a lender from our list of participating
lenders; our network of lenders will pre-qualify you for the program that meets your needs. You will also probably be asked to attend a homebuyer's
course created for first time home buyers.
You will also be asked to buy mortgage insurance to
protect your lender when they extend a loan to you.
Federal Programs For First Time Buyers
Also, many of our FHA and VA lenders require lower
amounts for down payments, and closing costs can be negotiated with
the seller to minimize your out of pocket expenses, or paid at least
partially through FHA if you buy a home through their programs.
First-Time Homeowners With Bad Credit
At times, the first time home buyer may have a bad credit history,
for various reasons, such as divorce or unexpected financial setbacks.
You can still purchase a home through our first time home buyer
program, but you will need to be especially sure to provide documentation
that you are working towards improving your credit history (see
article "How Much Home Can You Afford? Demystifying the Debt to Income Ratio").
You will want give documentation
of your current income (salary stubs and W2s for the past two years)
and expenses. If you have a history of repaying a debt or loan that
isn't on your credit report, or of prompt payment of your utilities
each month, you will be asked to provide documentation of your repayment,
since this helps to establish your repayment history, which lenders
take into consideration when extending a loan.
By taking advantage of special programs for first time home buyers,
, you can achieve your dream of home ownership even on a limited income or past bankruptcy. Our lenders
will work with you, and all the lenders in our network specialize in helping first time
home buyers through down payment assistance, paying closing costs,
and helping to streamline the process of applying. It's well worth your time to apply today and take the first step towards your goal of buying your first home.
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