First Time Homebuyer Programs: Are They Right for You?
First time homebuyer programs offer several advantages if you’ve never purchased property before. Often these programs are state or federally funded. Essentially, they’re designed to make home ownership more accessible to individuals and families that otherwise wouldn’t qualify. There are many potential benefits from reduced closing costs and lower interest rates to very low down payment requirements. But there are some limitations, eligibility criteria, and requirements to participate. Here’s what you need to know to decide if a first time homebuyer program is right for you.
Many lenders require that anyone participating in a special program attends a home ownership workshop or course. During these workshops, you’ll learn more about how to budget as a homeowner, how to determine how much you can afford to spend, and specifics about the mortgage program itself.
Each program has slightly different criteria for participation. Generally criteria falls into two categories. The first is that you’ve never owned a home before. In some cases, programs may also be available if you haven’t owned property in the last three to five years. It’s important to look at each program’s specific requirements as they tend to vary. The second criteria is often income-based. These programs are designed to assist buyers with lower to middle class incomes. If you earn too much money, you might not qualify.
The programs may have a number of restrictions that you need to consider. The first is the mortgage limit. First time loan programs are geared toward less expensive homes, so it’s important to factor that in when considering the property you plan to buy. A limited number of loan types are also likely to be available, for example a fixed thirty year mortgage. If you’re hoping for a variable product or a shorter loan duration, these programs may not be right for you. Finally, these loans are typically available only if the home you’re purchasing is your primary residence.
First time homebuyer programs can have numerous benefits. They can eliminate or reduce down payments and private mortgage insurance (PMI) requirements, offer grants to subsidize closing costs, reduce your interest rate, and much more. If you’re currently looking for ways to make your dreams of homeownership a reality with a limited income, it’s an option worth considering. If you have more resources or want increased flexibility, you may be better off with a different financing vehicle.
Prospective first time homeowners in the Las Vegas area should contact Sydnee Johnson today to discuss their plans and learn more about whether a first time homebuyer program is right for them.