Applying for first time home buyer loans has many benefits in the form of low down payment, tax discounts, mortgage and credit points and simple procedures for prequalification etc. The restrictions on net annual family income may also be eased to enable you buy apartment or small size independent home. You need to follow certain guidelines and fulfill some of the statutory ad financial terms imposed by the state and federal governments. Once you have completed these formalities successfully, you will be eligible for first time home buyer loans.
Basic Criteria for First Time Home Buyer Loans
- You may apply for the first time home buyer loans from any of the states across USA and get qualified. You need to be a resident of that state, city and county for a period of time as specified by the government. You may need to have a social security number and residence proof for the specified period of time. You may be veteran, citizen or valid resident.
- The area in which you choose to buy your home should have families and communities with lower family income as designated by the 1975 housing act. The other possible criterion is that the average family income of more than 50% of the population in the area needs to be less than the norms specified in section 42 of the 1986 internal revenue code. If your target area is able to meet one of the criteria, you may go ahead and search for a house to buy. Both the criteria are specified by the USA housing and urban development authority.
Down payment for First Time Home Buyer Loans
If you plan to get the first time home buyer loans through the VA scheme, you may be qualified for zero down payment option. Even otherwise you may approach the state or federal government banks to get details about qualifications needed for zero down payment option. Generally you may need to make 10% (variable according to changing terms) of the first time home buyer loans as down payment.
- If you have the option for making more than the specified down payment, you may get discount in the rate of interest after making specific number of installments.
- You may choose to take help from your friends or close family members for making the down payment. But the financial assistance you get should be according to the norms specified by the Federal Housing Authority.
- You need to document all the financial transactions through which you got the help for making down payment.
Repayment Terms for First Time Home Buyer Loans
- Once you are qualified for first time home buyer loans, you need to submit all the documents related to your sources of income, expenses, other existing credits, property details (if any), credit card and bank account details, insurance etc.
- The loan granting authority may choose to be the “property owner” until you has completely cleared the principal with interest and other service charges as applicable for the first time home buyer loans.