Jay Dacey Mortgage Team has several programs to help first-time homebuyers.

Note–even if you have owned a home before, you could still qualify as a first-time homebuyer! You can qualify for a FTHB mortgage if you have not had ownership interest in any property over the last three years. So if you owned a home but sold over three years ago, you can still qualify for these loans. You can also qualify if your only homeownership in the last three years was with an ex-spouse (if you’re buying again due to divorce).

First-time homebuyer programs offer buyers lower interest rates and lower mortgage insurance rates. The standard minimum down payment is 5%, but buyers who make below 80% of the county median income threshold can put down as little as 3%.

FTHB programs require an online homeownership education course. Each program has a different course, but most are free and made of online videos and comprehension quizzes.

Student Loans

A common stumbling block for any borrower, but particularly for first-time homebuyers, is student loans.  With Fannie Mae, we use 1% of the total balance of your student loans as your student loan monthly payment for qualifying.  With Freddie Mac, we only use 0.5% of the balance.  If you are on an income-based repayment plan and can document a lower monthly payment, we can use that instead.  Using these IBR plans can be a huge benefit to borrowers, giving them more purchasing power.

Down Payment

The biggest hurdle for FTHB borrowers is often coming up with the funds for closing. Homebuyers need not only their down payment (3-5% of purchase price) but need to be prepared for closing costs (2-3% of purchase price) and earnest money (varies, usually 1% of purchase price).

The earnest money is money that you put down upon acceptance of your contract to show the seller your seriousness. You can get this money back if you cancel due to inspection issues. On your loan docs, this will be marked as a “prepaid” portion of your down payment.

Your down payment can come from several sources–a loan from your retirement accounts, a withdrawal from your retirement accounts or from stocks, checking/savings accounts, or a gift. The use of gifts from a family member has steadily increased over the years.

Your realtor can also try to negotiate seller-paid closing costs for you. In a buyer’s market, sellers are more likely willing to contribute some funds toward your closing costs.

If you’re looking to start on your homeownership journey, give us a call! We’ll walk you through the process and get you set up with a real estate agent to help you find a home that fits your budget. There can be a lot of details and documents in the mortgage process, and we’re here to make sure everything is crystal clear and you feel confident in your purchase!

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