Buyer First Home Loan Time - Home Mortgages

Buyer First Home Loan Time - Home Mortgages - Home Loans

Advantages and Disadvantages of First Time Home Buyer Loans

First time home buyer loans allows the buyer to get into a house more easily. However, just because you’re a first time home buyer doesn’t mean you need a first time home buyer loan. These programs have some restrictions and strings attached. While they are a perfect fit for some, first time home buyer loans are the wrong choice for others.

What is a First Time Home Buyer Loan?

A person’s first home purchase is a big deal. It takes time, energy, and money. To help with the money hurdle, some people choose a first time home buyer loan. These programs vary depending, but the general idea is this: first time home buyer loans give financial assistance to qualified borrowers. They may do this in the following ways:

Allow for a very low (or no) mortgage down payment
Subsidize mortgage loan interest costs (they pay all or part of it)
Offer grants to qualified borrowers
Defer payments on the home loan mortgage

Get started on your First Time Home Buyer Application today!!!

Click here to apply for our First Time Home Buyer Application

Who qualifies for a First Time Home Buyer Loan?

As you might imagine, some people who have never owned a home are great candidates. Some mortgage loan programs offer first time home buyer loans to people who have not owned a home within the last three years.

Most applicants have to meet certain income restrictions to qualify for a first time home buyer loan program. In general, these programs try to limit the benefits to people with low and moderate monthly income levels. Usually, if you earn too much, you won’t qualify for the first time home buyer loan program.

First Time Home Buyer Loan Restrictions

Most mortgage loan programs put a dollar limit on the property you’re buying. You most likely cannot use a first time home buyer loan, to buy more expensive properties in your area. Instead, you’ll be limited to the selection of properties on the lower end of the spectrum. Again, the idea is to benefit people who have the most need, not the ones without need.

You also have to currently reside in a home as your primary residence. If you're going to rent the place out, don’t use the first time home buyer loan. Finally, the home you buy most likely has to meet some physical requirements. It must be in good or fair condition and free from any safety hazards (such as lead-based paint, and other safety).

The Pitfalls of the a First Time Home Buyer Loan

For some first time home buyers, these home loan programs are perfect. They open the door to the American Dream, home ownership. Communities also benefit from first time home buyer loan program – homeowners take care of their property, get involved, and contribute to the local economy. Nevertheless, first time home buyer loans can be the wrong choice in for some and in some cases.

With a first time home buyer loan, you face some challenges:

Lower value homes, which may not be the home you want
You might lose some benefits if you sell your home too soon
You may have to pay recapture tax
You may be limited to a short list of loan types (usually 30 year fixed rate mortgages for example)

With these given these restrictions, you might do your best to avoid a first time home buyer loan. These days, you can get traditional mortgages with very little down, if any.

The best thing to do is to explore all your home loan mortgage options. Contact your Heartland Financial Corporation loan consultant to compare a first time home buyer loan to the traditional mortgage loan. Or apply online today, so that a loan consultant can contact you to discuss your options.

Get started on your First Time Home Buyer Application today!!!

Click here to apply for our First Time Home Buyer Application

Specializing in these First Time Home Buyers Metro Areas in California: