Thanks to a variety of home loans made just for young families, they can now live the lives of their dreams. No longer is it true that you can't get a home loan to buy the house of your dreams if you have bad credit or don't have enough money. In the past, these factors might have made it impossible for a first-time home buyer to get a home loan, but they are no longer real problems.
There are many creative home loan (mortgage) programmes that help first-time home buyers get into the housing market. These programmes have opened up new opportunities for people all over the country. Workshops on credit plans to help with down payments, programmes to help people buy their first homes, and grants for first-time buyers are popping up everywhere. Many people don't know about these loans or grants for first-time home buyers, or they don't know how easy it is to get them.
A look at loans for first-time home buyers
Young people often find it hard to buy a home because they are just starting out in their careers and may still have a big student loan to pay off. Some people use first-time homebuyer options to help them get past the money problems that come with getting a home loan. You can choose from a number of these programmes, and each one is different based on where it is offered. The goal is that first-time home buyer loans help qualified borrowers get money to buy their first home. They can choose from the following ways to do this:
Allow for a very small (or no) down payment
Subsidize interest costs (they pay all or part of it)
Offer grants
Forgive loans
Put a cap on the fees that lenders can charge
Defer payments
The government will help first-time buyers get a mortgage.
Many people who are buying their first home are finding out that they can get help with their down payment or home loan. Every year, the U.S. Department of Housing and Urban Development gives money to the states and cities so that they can give it to low- and middle-income families for their down payment or closing costs. People who want to buy a home can get a loan for up to $15,000. The good news is that sometimes the money is given as a home loan that is completely forgiven after three to five years if the buyer agrees to stay in the home. Some programmes give back up to 10% of the cost of the item. To get help with a down payment, a person usually can't make more than 80% of the region's median income.
If you want to buy a house, the first thing you should do is get in touch with your state's housing finance agency. On the National Council of State Housing Agencies website, http://www.ncsha.org, there is a list of dozens of relevant agencies. Online, first-time home buyers looking for a home loan can find a lot of information.
First-time home buyers should also check with their local community development office to find out about loan programmes and grants. Don't forget about community groups and church leaders in your area. They might know about housing help programmes in the area.
Most of the time, a home buyer will try to get grants that add up to the amount of the home loan they want. A lot of the time, local banks help give these loans to people who are buying their first home. There are often conditions, but they may not be too big of a deal if it means getting free money or financial help that you couldn't get any other way. Each programme for a home loan will have its own set of rules.
One of the requirements for first-time home buyers to get one of these loans is that they must attend several hours of informal counselling. The business world wants to make sure that people who want to buy their first home know how to avoid predatory lending practices. They may also find out that their credit score is good enough for a traditional mortgage or home loan.
Counselling classes to get a mortgage
Even if you've bought a home before, the process can be hard to understand. Before starting the search, a person should know about offers, counteroffers, appraisals, closing procedures, and other things like that. This will help ease some of the stress and allow the person to make better decisions.
Home buyer education classes are offered by counselling services for first-time home buyers in the area. The programmes are free, and anyone who wants to buy a home can join.
Programs for newbies
Banks, financial institutions, and even non-profits like Goodwill are making it easier than ever for you to go from being a renter to a homeowner. There are a lot of programmes that can help with the down payment. These programmes can help make it easier to get the money you need right away. Here are just a few examples of what's out there.
-Wells Fargo. Their website is www.wellsfargo.com. Members of the military and people who work for the government can use the Home Opportunities programme. It lets you buy a single-family home, condo, co-op, or property with more than one unit without putting any money down.
-The Neighborhood Assistance Corporation of America, www.naca.com. This non-profit community advocacy and housing organisation offer home-buying workshops, financial counselling, and home evaluations.
The Nehemiah Program (www.nehemiahcorp.org) is the country's largest privately funded programme to help with a down payment. The Nehemiah Program gives up to 6% of the final sales price of a home as a gift, which can be used for a down payment, closing costs, or financing for a new home or the purchase of an existing home. There are no limits on income, assets, or where you live to qualify.
First-time home buyer loans are great for some people, but the wrong choice for others.
Problems with a first home loan
These programmes are great for some people who are buying their first home. They make it possible for families who wouldn't have been able to buy a home before to do so. First-time home buyer loans are also good for communities because homeowners take care of their homes, get involved, and help the economy. Still, first-time home buyer loans aren't always the best way to go.
With a subsidised loan for a first-time home buyer, you have to deal with the following: -A home with a low value might not be the one you want. If you sell your home too soon, you might lose some of the benefits of the programme.
You might have to pay taxes on some of the benefits you got.
-You may only be able to get a few types of loans (only 30-year fixed-rate mortgages)
-You may have to give the programme a cut of any increase in the value of your home.
Given these rules, it might be best to stay away from subsidised loans for first-time home buyers. If you have good credit, a plain mortgage will probably work out best for you. If your FICO credit score is higher than 720, the subsidised first-time home buyer loan probably won't help you. As soon as your score drops below 680, the subsidised programme will look better. Traditional home loans and mortgages can now be gotten with very little money down.
