One of the largest purchases an individual is likely to make in their lifetime is to buy a home. It can also prove to be a very worthwhile investment when done properly. Building home equity is a very enticing concept for prospective homeowners, but you can definitely end up paying more than you have to on your mortgage if you're not careful. First Time Buyer Programs were created to assist those who may not be well off financially, or are not experienced with the world of home loans and interest rate variety.

What First Time Buyer Programs Can Offer

While details for these loan programs and plans can vary, there are some common benefits that many of them tend to offer. These include:

• Little or no down payments
• Subsidized interest (little or no interest)
• Put a ceiling on the fees lenders charge you
• Allow you to defer payments
• Offer forgiveness loans

It’s worth noting that not all First Time Loans offer these benefits, so be sure you’ve done your homework on a specific plan before you dive head first into one.

Who Are First Time Home Buyer Loans Available Too?

You may be surprised to know that these programs are not exclusively available to first time homebuyers. While they are intended for buyers who have not previously owned a home, some plans allow these benefits to individuals who haven’t been able to secure a home in over three years.

Something else lenders consider when approving First Time Buyer Programs is your overall income. Most of these plans were created for people with low incomes that don’t exceed a particular benchmark. This figure tends to vary between lenders, but if you make a great deal of money you can pretty much count on not qualifying for a first time buyer loan.

The Limits of First Time Buyer Programs

These types of loans can’t be used on just any property. There are parameters that these programs encompass that end up limiting how much money you are entitled too and which property you can use it on. The more expensive properties are probably not included in many of these plans.

Another restriction in some cases may be that you must use the home you’re borrowing money to purchase as your primary residence. The point of this particular limitation is to prevent the borrower from renting the property out to other tenants. This may sound a bit like micro managing, but it’s important to remember this type of plan was established to help those most in need, not necessarily to further someone financially.



The Risk A First Time Buyer Program May Actuate

While very helpful to those in need of a home, first time buyer loans are not without risk. Some of these down sides include:

• Your options to choose a loan type may be limited- some programs require 30-40 year fixed- rate loans, which may be longer term than you want.
• You may have to share increased equity with the lender- if you improve on the house in some way, or the value increases, you may have previously forfeited that gain in your initial contract.
• Additional Taxes- you may be required to pay additional taxes on some of the benefits you receive through the plan.
• Settling for a Home- based on the above-mentioned restrictions, the home you get may not be the one you really want.

Is A First Time Buyer Program Right For Me?

That depends. As mentioned above, there are both pros and cons. How much weight each one carries depends partly on your own financial situation. Also, there are more complex details that play into each specific loan, so you’d have to look over a few different ones to be sure if that was your best options.

This process can take a lot of time and energy, so your best bet is to have someone do the hard work for you. Fill out our free contact form, and let one of our experienced representatives work out the details for you. Also, refinancing help is available, and perhaps not as far out of reach as you may have thought. Contact us today.