You hear the phrase “first-time home buyer” frequently, but who does that include exactly? Many assistance programs are geared towards first-time home buyers. However, more often than not, some people don’t realize they actually qualify under this category! This leaves many home buyers not realizing they’ve missed the opportunity for assistance. Once you understand who qualifies as a first-time home buyer, you may realize that you’re on the path to homeownership sooner than you think!
Who Qualifies As a First-Time Home Buyer?
We’ll begin by providing you with a definition of a first-time home buyer. HUD defines a first-time home buyer as, “An individual who has had no ownership in a principal residence during the 3–year period ending on the date of purchase of the property.” In other words, if you currently do not own a home, and haven’t in the past three years, you qualify as a first-time home buyer! Many hopeful home buyers do not realize this, and end up missing the opportunity for assistance you can receive from being qualified as a first-time home buyer.
When you are qualified as a first-time homebuyer, you can qualify for various loans and assistance programs that can help with your closing costs, down payment, and more! If you are unsure of whether you qualify or not, we recommend checking your eligibility. It’s possible you could discover you’re eligible when you initially thought you wouldn’t be. This could help you become a homeowner sooner than you thought!
How Do I Determine My Eligibility?
There are several factors to consider when determining first-time home buyer eligibility. For starters, let’s talk credit score. With an FHA loan with a down payment of 10% or higher, you’ll need a credit score of 500 or higher. With a 3.5% down payment, you’d need a score of at least 580. As far as income goes, you’ll want to be sure you can comfortably pay your mortgage loan payments. Your debts, closing costs, and down payment should also be considered.
If you’re worried about being able to afford a down payment, we recommend looking into down payment assistance programs to see if you qualify! A minimum down payment is typically 3-5% of the home purchase price. However, along with this, you will need to ensure you have money to cover other homebuying expenses, such as closing costs, upfront fees, homeowners insurance, and so on.
If you qualify as a first-time home buyer, an FHA loan is the way to go! These loans are more flexible in credit, income, and down payment requirements. They are typically easier to qualify for than conventional loans, and you could potentially put down as little as 3.5% for fixed-rate loans! An FHA loan is a secure choice for first-time home buyers.
The most popular option for borrowers, conventional loans, are also a great route for first-time home buyers! As a first-time home buyer, you qualify for a 3% down payment. With conventional loans, fixed rates offer consistent monthly payments and simplify planning and budgeting. ARMs may have lower initial monthly payments than fixed-rate loans and adjust after the fixed term.
Get started today by calling Team Crescenzo at 843-628-4860!
Ready to start your application? Awesome! We can’t wait to work with you and help you achieve your goal of owning a home!