If you are a first-time homebuyer, you can often qualify for programs
that will assist you in buying your home, even though other home
purchasers may not be able to.
As a first-time homebuyer, the Department of Housing and Urban
Development, for example, determines that you are a first-time
homeowner if you have not had "ownership interest" in a home within the
last three years. This is perhaps the biggest obstacle to getting grant
assistance, because if you have not owned a home in the last three
years, and you meet certain financial requirements, you probably will
qualify for some grant money that can help you purchase your home. In
some cases, even if you have less than good credit, you may still be
able to apply for a grant. A low interest rate loan from FHA, as well,
can help you get in your home for less money than you would otherwise
be able to, such as through traditional lenders.
What's offered through first-time homebuyer programs?
One of the most prevalent resources available to first-time homebuyers
that are of modest means is an FHA loan. An FHA loan, which is insured
by Housing and Urban Development, is often used by low income buyers,
true, but can be used by just about everyone. There are loan limits,
but this is to protect the program itself from losses, which only helps
ensure that it stays in service, so that people can continue to take
advantage of it.
For the most part, an FHA loan gives you a lower interest rate then
something offered by a conventional mortgage lender. You'll also
usually get a lower monthly mortgage payment, because mortgage
insurance premiums are generally lower for these types of mortgages, as
well.
You can often refinance and consolidate debt if you've had some credit
difficulties at a much lower interest rate then you can with other
programs, when you have credit issues.
Remember, the main focus of first-time homebuyer programs is to get you
in a house (sometimes with price restrictions), and it's usually to
help you with costs, lower down payments, etc., that would otherwise
stop you from owning your home. However, you will need to be able to
afford the mortgage yourself once you're in your house, so sit down and
figure out what you can afford to pay before you begin the process.
Finally, although it's hoped that this never comes to pass, in some
cases, if you've purchased your home with an FHA loan, you may be able
to stay in your home even if you experience financial difficulty such
that you fall behind on your mortgage. HUD offers Loss Mitigation
programs that can help you avoid this.
Again, as a first-time homebuyer, this is not something you want to
think about, but it may be another good reason to get an FHA loan for
your first home, assuming you qualify.
__________________________________________________________________________________________ |
