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What is a First Time Home Buyer Loan?
Contrary to common belief, you could have owned a home in the past to qualify as a "first time homebuyer". However most first time homebuyer programs define a first time homebuyer as a person that has not owned a home as their primary residence in the three years preceeding purchasing a property and utilizing the first time homebuyer program. To document and demonstrate that you haven't owned property in the previous three years, most if not all, first time homebuyer propgrams require that you provide the most recent three years individual tax returns to show that you have not claimed mortgage interest expense as an itemized deduction.
A person’s first home purchase is a big decission and step! It takes time, energy, and money. First time homebuyers who utilize the first time homebuyer programs usually do so for one of four reasons.
BENEFITS OF FIRST TIME HOMEBUYER PROGRAMS
- Down Payment Assitance
- Reduced Rate (subsidized interest cost through state or local government)
- Expanded Underwriting Standards
- Subsidize Interest Costs
Who Gets First Time Home Buyer Loans?
As you might imagine, individuals who have never owned a home are good candidates. If you have owned a home previously, but not in the last 3 years, you may qualify as a first time homebuyer. Again, check to see what’s available to you. You may have to meet certain income restrictions to qualify for a subsidized first time home buyer loan.
First Time Home Buyer Loan Restrictions
Most programs put a cap on income and purchase price or property value of the home to qualify for the program. You probably can’t use a first time home buyer loan to buy the more expensive properties in your area. First time homebuyer programs are designed to help people in the low to moderate income brackets.
Other Programs Utilized by First Time Homebuyers
There are many first time homebuyer programs available. They can offer no money down, as little as 3 percent down payment, assist in paying closing costs and sometimes the city you live in can give you down payment assistance. Here's an example of some of the 1st time homebuyer programs available in today's market.
- FHA
- VA Loan program (Veterans only)
- My Community
- MCC (Mortgage Credit Certificate)
Please contact me for more information.
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