Buying a home is one of those experiences that is always going to have some type of stress related to it. Especially if it is your first time. I want to give you some first time home buyers assistance to provide you with some valuable information.
All of us have had experiences at trying something for the very first time. It might be picking up a new hobby, playing a new sport, switching careers, moving to a new city, or traveling to a different country.
Some of us even go to the extreme like my wife, who went out and bought a car that had a manual transmission without knowing how to drive manual shift. Thank goodness she is a quick learner , nd the ride home was not as bad as you might think.
No matter what experience you might have had, you might agree that any type of assistance would have been welcomed with open arms. I didn’t have much first time home buyers assistance when I was shopping for my condo. I feel if I can provide you with some resources to help you purchase your first home, we both win!
First Time Home Buyer Qualifications
Owning a home can be a valuable experience but also a complex process, especially for the first time home buyer. You have to know when is the right time in order for you to take that leap of faith. Here are a few guidelines to help you determine if now is the right time for you to buy:
- Income ~ One of the most important qualifications for a first time home buyer, is a steady income. New home buyers should have a reasonable degree of job security. This means a good likelihood of keeping a current position and not having a history of job hunting.
A buyer’s income (or the combined income of a couple) versus the amount of debt will determine the amount of the mortgage lenders offer. You definitely should have a discussion with an experienced lender before you start looking. In fact, this should probably be the first thing you do, period!
- Savings ~ A good amount of savings is mandatory for first time home buyers. Many homes require a down payment at or near 20 percent of the home’s selling price, which can easily amount to tens of thousands of dollars.
There are programs, such as loans through the Federal Housing Authority, or FHA, require lower down payments. There are also first time home buyers grants and programs that will give you money toward the closing cost.
Still, home buyers need cash on hand to make a down payment and to pay closing costs, which include title fees and the cost of an inspection. First time home buyers should also become familiar with all of the federal, state and local assistance programs available.
These programs each come with their own conditions, but save buyers a great deal of money. As I mentioned earlier, a discussion with an experienced lender should provide you with information to determine how much of your savings will need to be used.
- Credit History ~ First time home buyers should be aware of their credit histories and expect mortgage rates to reflect them. A first time home buyer should have a solid credit history. While it does not take perfect credit to get a decent mortgage, buyers with better credit scores get mortgages with lower interest rates.
Good credit helps buyers be exempt from certain fees during the mortgage process. If you are interested in how to get and maintain a credit report, check out my article How Do I Repair My Credit.
- Commitment ~ First time home buyers should be committed to occupying a house for several years. While some home buyers use the property as an investment, renting it out or owning it for only a short period of time before selling it again, your first home should be something that you occupy.
Besides needing ample time to make improvements and build equity before moving on to a better home, this also gives buyers a chance to save for a future down payment. Owning a home is an experience all in itself, especially for the first time buyers. You have to be committed to get the value out of the experience.
First Time Home Buyers Class
Often referred to as Home Ownership Counseling, taking a first time home buyers class is an important first step in home ownership. These classes can usually be offered by a real estate office, or a local community organization. Depending on where you sign up for your class, you can earn a Homeownership Education Certificate. A lot of lenders require this now.
When you take this course, you can expect to learn about the buying process from beginning to end. Not only can you hear information from real estate agents but usually they will partner up with their lender of choice, and you can get information about the loan process as well.
To be perfectly honest, I would sign up for the class before I do ANYTHING else. As I mentioned, the first time home buyers class will give you steps to take that will keep you organize and make your process run smoother.
First Time Home Buyers Grant
If you are looking for financial assistance, a first time home buyers grant is one way to help assist with the financial aspect. Federal grants can be an important source of funding for the first time home buyer. Unlike a loan or mortgage, a grant does not have to be repaid, which means these programs are targeted to areas where the government wants to invest in the revitalization of a community.
All federal grant programs aimed at first time home buyers will require the individual to attend a HUD approve house counseling class. These classes help to prepare individuals for home ownership by assisting them in the process of getting their finances in order.
By doing so, these individuals stand a greater chance of qualifying for a mortgage. For example, simple courses in home economics or household budgeting are important to the financial success of the individual and achieving the grant program’s goals.
First Time Home Buyer Benefits
Owning a home has numerous advantages over renting, including the chance to build up equity and an opportunity to make customized modifications and improvements to your living quarters. The buyer is going to have access to special loan programs that can help them to get into a house faster and less costly than those who have previously bought homes before.
These programs offer buyers benefits such as low down payments, reduced interests and a limit to the amount of money that lenders can ask for. These are some first time home buyer benefits.
Obviously being in real estate, I think you should always own a home before you rent, if the situation fits you. You will always be better off in the long run buying a home versus renting one.