The average cost to buy a house is almost $350,000. That’s before closing costs. There’s also the matter of coming up with a downpayment for a house of that price.
If you don’t know how you’re going to afford the expense, consider seeking out a first-time home owners program. They’re designed to help people like you buy a new home.
There are a lot of them to pick from. That’s why we’re here to help you pick the right one for your situation and budget. Check out these homebuying tips to learn everything you need to know about first-time home buyer loans.
What Is a First-Time Home Owners Program?
A first-time home owners loan is a program put in place to help new buyers afford the house of their dreams. Depending on your situation, you could qualify for down payment assistance.
Some programs will allow you to take advantage of lower interest rates and tax credits.
Types of Programs
There are a lot of programs out there. We’ll start with the Good Neighbor Next Door program.
This option is available to educators, firefighters, and law enforcement. If you qualify, you could buy your home for half of what it’s listed as. In most cases, you’ll have to agree to live in the home for a set number of months to receive assistance.
HomeReady loans offer mortgages for a low downpayment of 3% to those with a credit score of at least 620. Home Possible is a similar program, but the minimum credit score is 660 instead of 620.
If you earn too much income to qualify for the HomeReady or Home Possible program, a Conventional 97 mortgage loan might be right for you.
FHA mortgages work through the Federal Housing Association. If you have a credit score of 580, you could get a new home for only a 3.5% downpayment.
If your credit score is less than 580 or you have no credit score at all, the Association may still be willing to work with you.
VA loans are run through Veterans Affairs. Those who qualify can get a home without a downpayment. These are only a few of the many first home buyer loans.
How to Qualify
To qualify for most first-time home owners programs, you must be purchasing your first house. Some lenders may be lenient if you’ve had your name on a title but sold the home four or more years ago.
Most programs have credit score requirements. Some are more flexible when it comes to credit history than others. Many lenders have a list of qualification requirements on their websites.
Buy a House You Love
Between affording a downpayment and closing costs, buying a house can be out of the question for many. The only way to afford it is if you qualify for a first-time home owners program.
Start asking around today to find out which one of the many loans out there are right for your situation.
For more homebuying tips and tricks, visit the Home Essentials section of our blog.