First Time Home Buyer Loans
Home ownership is more accessible through the use of first time homebuyer loans. You do not need to use a special loan though for your first home purchase. There are restrictions with first time home buyer programs, so they will work for some and wont for others.
Programs will vary, but they are designed to offer financial assistance to qualified borrowers. This can come in the following ways:
- Allowance for low down payment
- Grants to help with a down payment, improvements and closing costs
- Subsidized interest costs
- Limits on fees
- Loan forgiveness
Finding Loan Programs
In order to find a good program you will need to do quite a bit of research. You are able to search the web and include your location in your search.
First time homebuyer programs are aimed at those that have never owned a home. You may find that you will need to meet certain financial restrictions. However, first time homebuyer programs reserve benefits for people that have a low or moderate income. Your chances are then reduced if you earn too much or have substantial assets.
You will unlikely be able to use a first time homebuyer loan to buy an expensive property in your area. You will find that you will be limited to less expensive properties.
You will need to live in the home as your primary residence. If you plan on renting the home out then you will need to look a different type of loan.
The home that you buy will also need to meet physical requirements. It will need to be in good condition and free of safety hazards.
The Pitfalls of First Time Home Buyer Loan
With a specialized loan there are some challenges. These include:
- Price restrictions
- If you sell too soon you may lose some benefits
- You might have to pay recapture tax
- You might be limited to a short list of loan types
- If your home increases in value this might have to be shared with the program.
In light of these restrictions you might be better off looking for a different type of loan.