First Time Homebuyer
Programs: What Steps a
homebuyer should make first
By Lisa Phillips
Programs: What Steps a
homebuyer should make first
By Lisa Phillips
Step One
First, you have to decide how much house you can afford. A good way to figure this
out is by evaluating your total income, your total monthly expenses, credit score,
current mortgage interest rates and amount needed for downpayment .
Once you determine how much you can comfortably afford then move on to the next
steps in purchasing your first home.
Step Two
Shop for a Loan and Get Pre-approved. You have many options. Research lenders,
compare fees and costs, compare interest rates and negotiate for the best deal.
Watch out for predatory lenders. Predatory lending involves higher-risk loans such
as balloon loans, interest only loans, and exorbitant pre-payment penalties.
Step Three
Know Your Rights. You have the right to:
You may qualify for a First-Time Buyer Program or a Home Buyer Program. Home
buyer programs can offer lower interest rates, lower or no downpayment, reduced
taxes, reduced closing costs and/or closing cost assistance
Who is Eligible for a First Time Buyer Loan. You must not have owned a home in the
past three years to be eligible for a first time home buyer program. The programs
vary from state to state and are designed to meet a first-time buyers specific needs.
Look for Federal, State and Community Home Buyer Programs. Each State has
specific programs for home buying assistance. A good resource is the Federal
Housing Administration (FHA)
Sample of FHA Programs:
First, you have to decide how much house you can afford. A good way to figure this
out is by evaluating your total income, your total monthly expenses, credit score,
current mortgage interest rates and amount needed for downpayment .
Once you determine how much you can comfortably afford then move on to the next
steps in purchasing your first home.
Step Two
Shop for a Loan and Get Pre-approved. You have many options. Research lenders,
compare fees and costs, compare interest rates and negotiate for the best deal.
Watch out for predatory lenders. Predatory lending involves higher-risk loans such
as balloon loans, interest only loans, and exorbitant pre-payment penalties.
Step Three
Know Your Rights. You have the right to:
- Shop for the best loan and terms.
- Compare lenders and mortgage brokers.
- Know the total cost of your loan, including points, fees, interest rates, closing
and settlement costs. - Request a Good Faith Estimate of the cost of the loan, including points and
fees, interest rate, and type of mortgage loan (fixed or adjustable rate). - If using a mortgage broker you have the right to know how much the broker
will be paid by you and the lender.
You may qualify for a First-Time Buyer Program or a Home Buyer Program. Home
buyer programs can offer lower interest rates, lower or no downpayment, reduced
taxes, reduced closing costs and/or closing cost assistance
Who is Eligible for a First Time Buyer Loan. You must not have owned a home in the
past three years to be eligible for a first time home buyer program. The programs
vary from state to state and are designed to meet a first-time buyers specific needs.
Look for Federal, State and Community Home Buyer Programs. Each State has
specific programs for home buying assistance. A good resource is the Federal
Housing Administration (FHA)
Sample of FHA Programs:
- FHA 203(k) Rehab Program. The Section 203(k) program was
designed to assist borrowers in purchasing homes that need
improvement. The mortgage is structured so that the borrower gets one
mortgage loan, at a long-term fixed (or adjustable) rate, to finance both
the acquisition and the rehabilitation of the property.
- Good Neighbor Next Door Program. This program is eligible for
Teachers (pre-Kindergarten - 12th grade); Law Enforcement Officers;
Firefighters; and Emergency Medical Technicians. Participants of this
program will get a 50% discount from the list price of homes located in
revitalization areas. In return you must commit to live in the property for
36 months as your sole residence.
- Kiddie Condo Program. The Kiddie Condo Loan is a mortgage loan
which enables an individual to co-borrow with a relative, such as a
parent or grandparent, who will use their income to aid the new
borrower in qualifying for the loan. The borrower and relative are
viewed as co-borrowers and both will be on the title to the property and
are responsible for the mortgage loan. The required down payment is
only 3% of the purchase price.
One of the co-borrowers is required to make the property their primary residence,
but they have the flexibility to rent any additional rooms to help cover the mortgage
payments. Regardless of what the name "Kiddie" may imply, there is no age
restriction.
but they have the flexibility to rent any additional rooms to help cover the mortgage
payments. Regardless of what the name "Kiddie" may imply, there is no age
restriction.
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Related Topics
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| Foreclosure Help and Options | |
| Down Payment Assistance by State | |
| Types of Mortgage Loans | |
Many excited first-time homebuyers start looking for a home first. This should not
be the first step. It's easy to find several homes you may like but this should be the
last step.
be the first step. It's easy to find several homes you may like but this should be the
last step.
| Copyright RebuildCreditScores 2008. All Rights Reserved |
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