Did you know you only need a 3.5 percent down payment to buy a home if you’re eligible for FHA financing? If your tax refund is a sizable chunk of change, now’s a great time to buy because it’s a buyers market, no doubt about it. For first-time homebuyers, now’s an especially advantageous time to take the plunge.
The most common loans for first-time buyers, without a doubt, are Federal Housing Administration loans. FHA loans require only a 3.5 percent out of pocket down payment. For instance, on a $100,000 loan, the buyer would only need to come up with $3.500 and the seller could pay the rest of the closing costs. Still a bit short on funds to close? The nice thing about FHA is that it allows gifts from blood relatives. So if you need some help, Daddy can close the gap. You are limited to a base loan amount on average of $200,160, but that doesn’t usually pose a problem for first-time buyers.
Tennessee Housing Development Agency specifically targets first-time homebuyers. It sets interest rates below current market rates, offers reduced mortgage insurance, and can assist with down payments if you go to class and learn about budgeting and home buying. I spoke with a couple the other day, and we figured out they were getting paid roughly $360 an hour to go to class for eight hours. Not a bad deal, huh? However, you must income-qualify for this program. It’s designed to assist moderate- to low-income families. I guess the reasoning is that if you make a certain amount of money, you can afford a down payment. And its loan limit cap mirrors FHA for the most part. THDA can be used to finance FHA, Veteran, Rural Housing or conventional loans.
Speaking of Rural Housing and Veterans, these are also great deals for first-time homebuyers. Both offer 100 percent financing without monthly mortgage insurance! Of course, you have to fit into a niche to qualify for either. If you aren’t a veteran or have a pertinent connection to the qualification guidelines, you can forget about VA. But it has no income limit, no loan limit, and the seller can pretty much pay for all closing costs. What a deal! With Rural Housing, you not only have to income-qualify, you must also property-qualify. Like it sounds, Rural Housing loans encourage buying homes in less populated areas.
With foreclosures abounding, great deals exist that allow for instant equity for first-time homebuyers. But be aware, most of these programs mentioned are quite particular about the condition of the property. Any health and safety issues must be addressed before closing. Many times the banks that own foreclosure properties want to sell “as is.” It can be difficult to marry first-time buyer financing with foreclosures, but it can be done. Just be sure to work with a Realtor who is experienced in this area and a lender who knows their stuff.
So, if you’re getting money back from Uncle Sam, stop paying rent and start building equity in a home of your own!
No comments:
Post a Comment