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 will have on objects like minimal credit score scores, down fee help, rates of interest, closing prices, revenue 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 typically outlined as those that haven’t owned a main residence inside the previous three years. This definition can fluctuate barely relying on which mortgage packages you’re contemplating.

Who Qualifies as a First-Time Homebuyer?

It could sound unusual, however opposite to standard 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-about a first-time homebuyer in case you owned a house previously however meet sure standards.

For example, in case you’ve skilled a big life occasion that prevented you from buying a house previously three years, equivalent to a divorce or a foreclosures, you could possibly nonetheless qualify for some first-time homebuyer mortgage packages.

Naturally, the {qualifications} can fluctuate primarily based on the mortgage program. With a VA mortgage, supplied by the Division of Veterans Affairs, you have to be an active-duty service member, veteran, or surviving partner of both group. A primary-time homebuyer would nonetheless have to fulfill 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 Dwelling?

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. Usually, crucial stipulation is that you could’t have owned a main residence inside the previous three years. 

What Packages Are Obtainable to First-Time Homebuyers?

There are many mortgage packages created particularly to assist first-time homebuyers obtain their purpose of proudly owning a single-family home. These packages are sometimes supplied by 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 Growth (a HUD mortgage).

For instance, the FHA mortgage program gives some advantages to first-time homebuyers, together with decrease down fee necessities and decrease minimal credit score scores. VA loans additionally supply 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 fee. There’s no higher type of down fee 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 just make a 3% down fee. 

You too can use nontraditional revenue sources equivalent to alimony funds, Social Safety, rental revenue, 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 presents loans which might be assured by the USDA Rural Growth Assured Housing Mortgage Program. These loans typically supply no down funds and decrease rates of interest in case you purchase in rural areas. 

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

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

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

Want Extra Assist with Your Dwelling 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 data, it’s necessary 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 occupied with an FHA mortgage, a VA mortgage, or a traditional mortgage, there are nearly actually choices on the market that can suit your monetary scenario.

So we’ll go away 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 may obtain your dream of proudly owning a house. 

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

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