We all know the story: A part of you is considering homeownership, however one other half is not sure whether or not you’ll qualify as a first-time homebuyer. The mortgage course of can appear intimidating the primary time round, which is totally comprehensible. You haven’t owned a house earlier than! 

To not fear, although, as a result of APM is right here to shed some gentle on what it means to be a first-time homebuyer, the mortgage packages accessible to you, and any questions you could have on objects like minimal credit score scores, down cost help, rates of interest, closing prices, earnings limits, and extra.

So let’s get to it!

What Is a First-Time Homebuyer?

Let’s begin with the fundamentals: First-time homebuyers are usually outlined as those that haven’t owned a main residence inside the previous three years. This definition can differ barely relying on which mortgage packages you’re contemplating.

Who Qualifies as a First-Time Homebuyer?

It could sound unusual, however opposite to fashionable perception, the time period “first-time homebuyer” refers to extra than simply individuals who haven’t owned a house earlier than. You should still be thought of a first-time homebuyer if you happen to owned a house up to now however meet sure standards.

As an illustration, if you happen to’ve skilled a big life occasion that prevented you from buying a house up to now three years, comparable to a divorce or a foreclosures, you possibly can nonetheless qualify for some first-time homebuyer mortgage packages.

Naturally, the {qualifications} can differ based mostly on the mortgage program. With a VA mortgage, provided by means of the Division of Veterans Affairs, you should be an active-duty service member, veteran, or surviving partner of both group. A primary-time homebuyer would nonetheless have to satisfy all of the {qualifications} for the VA mortgage as a first-time homebuyer, along with proving their eligibility standing.

Can You Have Beforehand Owned a Residence?

As we simply touched on, sure. There are cases the place you may need owned a house earlier than however can nonetheless qualify for a first-time homebuyer program. Sometimes, an important stipulation is that you would be able to’t have owned a main residence inside the previous three years. 

What Applications Are Accessible to First-Time Homebuyers?

There are many mortgage packages created particularly to assist first-time homebuyers obtain their objective of proudly owning a single-family home. These packages are sometimes provided by means of authorities entities, such because the Federal Housing Administration (an FHA mortgage), the Division of Veterans Affairs (a VA mortgage), and the Division of Housing and City Improvement (a HUD mortgage).

For instance, the FHA mortgage program gives some advantages to first-time homebuyers, together with decrease down cost necessities and decrease minimal credit score scores. VA loans additionally provide those that qualify as a first-time homebuyer—and who’re veterans/active-duty service members/surviving spouses—the prospect to buy a house with no down cost. There’s no higher type of down cost help than that!

You’ve additionally bought Fannie Mae and Freddie Mac. They provide mortgage packages that help first-time homebuyers in accessing inexpensive mortgage choices with aggressive rates of interest and versatile eligibility necessities. These embrace financing as much as 97% of the acquisition value, that means that you simply make a 3% down cost. 

You may as well use nontraditional earnings sources comparable to alimony funds, Social Safety, rental earnings, and so forth, to qualify for these assured loans. A mortgage lender can provide the lowdown on all of the engaging mortgage packages that could be best for you.

Many individuals additionally overlook the assorted incentives for buying in rural areas. The U.S. Division of Agriculture gives loans which are assured by the USDA Rural Improvement Assured Housing Mortgage Program. These loans usually provide no down funds and decrease rates of interest if you happen to purchase in rural areas. 

Do You Must Be a First-Time Homebuyer to Take Benefit of Down Cost Help?

Down cost help (DPA) packages are continuously accessible to first-time homebuyers to assist mitigate the upfront prices related to shopping for a single-family house. These can embrace the down cost and shutting prices.

You might assume that these packages are usually for first-time patrons, since they could want probably the most assistance on their first single-family house buy. However many DPA packages are open to different patrons as nicely. These can embrace those that meet sure earnings limits, minimal credit score scores, and different standards, no matter whether or not they’ve owned a house earlier than. DPA packages are inclined to differ by location and could also be provided on the federal, state, or native ranges.

Want Extra Assist with Your Residence Buy?

The time period “first-time homebuyer” can apply to extra than simply people who’ve by no means owned a house earlier than. Those that haven’t owned a principal residence inside the previous three years should qualify for varied mortgage packages and shutting price help packages designed to make homeownership extra accessible for everybody.

Even with all this info, it’s vital to seek the advice of a educated mortgage lender when figuring out who qualifies as a first-time homebuyer. Our APM Mortgage Advisors can information you thru the method and make it easier to uncover which mortgage packages you qualify for.

Whether or not you’re involved in an FHA mortgage, a VA mortgage, or a standard mortgage, there are virtually definitely choices on the market that can suit your monetary scenario.

So we’ll depart you with this: Homeownership is inside attain for a lot of, many folks, no matter whether or not you’re a first-time homebuyer or have owned a house earlier than. With the proper assets and steering, you possibly can obtain your dream of proudly owning a house. 

Contact an APM Mortgage Advisor at present to discover your choices and get on the trail to homeownership!