First-Time Home Buyer Programs for Southington, CT
Homeownership is a part of the American dream. Everyone grows up wanting to own a home and build their family in that home. However, purchasing real estate is a hard thing to achieve for many Americans. They have many financial obligations such as rent, health insurance, car payments, car insurance, utility bills, and food. That often does not leave much for you to save towards a down payment on a home. Thankfully, the government has mandated first-time homebuyer programs that make it easier for people to buy themselves a home.
Instead of the regular 10%-20% that conventional loans may require for a down payment on a home, FHA loans allow you to put down as little as 3.5% of the purchase price. This is much more attainable for people than conventional loans. It also allows people to get into home ownership quicker.
Benefits of First-Time Home Buyer Programs
- Lower Down Payment: Conventional mortgage loans may require up to 20% of the purchase price as a down payment. That is a significant amount of money that is impossible for the average person. FHA loans only require 3.5% to qualify.
- Lower Credit Score Requirements: Credit score requirements will vary by the lender and the type of mortgage that you are attempting to qualify for. The minimum for conventional loans is typically around a credit score of 620. Meanwhile, FHA mortgages require a score of 580 with a 3.5% down payment. If you can afford a 10% down payment, the credit score requirement can be as low as 500.
- Lower Debt-to-Income Requirements: Your debt-to-income ratio is a comparison of your monthly debt to your monthly income. To calculate your DTI, add up all your monthly expenses and divide it by your gross monthly income. Your debt should include student debt, car payments, and other monthly financing plans. The resulting number will be your DTI expressed as a percentage. FHA mortgages allow for a debt-to-income ratio of 43%, which may be even lower depending on other factors.
Who Qualifies for a First-Time Home Buyer Program?
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First-time home buyer programs are designed to assist those who are purchasing their first home. Your eligibilityfor a given program will depend on many things, including your specific circumstances and the demands of the program in question. Here are some things to keep in mind as you prepare to apply:
● Definition of a First-Time Home Buyer: In order to qualify for a first-time home buyer program, it’s important to be sure that you meet the criteria. The definition of a first-time home buyer can vary depending on the specific program and location, but generally qualified applicants will not have owned a principal residence within the past three years. If you have previously owned a home but more than three years have passed, you could still qualify as a first-time home buyer. Our office can provide further insight.
● Income Limits: Many first-time buyer programs have income limits. This ensures that these programs are available to those who need it most. These income limits are usually based on the area’s median income; qualified applicants will have moderate to low incomes based on their local statistics. Income limits may vary depending on the program and location, so it’s important to check on a case-by-case basis.
● Financial Requirements: First-time home buyer programs will have requirements that you’ll need to meet based on your credit score and certain financial stipulations. You’ll want to make sure that your credit score meets the program’s criteria and be able to demonstrate that you can responsibly manage your debt. Our office can help you arrange matters to meet the necessary criteria.
● Home Purchase Price Limits: Some first-time home buyer programs have limits on the purchase price of the home. These limits are set to ensure that the program benefits individuals or families purchasing homes within a certain price range. The limits may vary depending on the location and the program’s guidelines. It’s important to be aware of these limits when considering a first-time home buyer program.
● Homebuyer Education: Many first-time home buyer programs require participants to complete a homebuyer education course. These courses provide valuable information about the home buying process, provide financial management strategies, and describe homeownership responsibilities. Completing one of these courses will demonstrate your commitment to understanding the responsibilities and challenges of owning a home.
Contact us if you are interested in learning more about the first-time home buyer programs from Primary Residential Mortgage Inc. We work with prospective home buyers throughout the New Haven, Middletown, and Madison, CT area; get in touch to get started!
Contact Our Mortgage Loan Specialists Today!
Primary Residential Mortgage Inc. is a mortgage company serving the Southington, CT area. We have first-time home buyer programs that make the dream of home ownership easier to obtain. The lower credit score requirements, lower down payments, and lower debt-to-income requirements make it much more affordable for the average American to buy a home. It is one of the most popular programs because it benefits so many people that would be unable to buy real estate otherwise. Contact us today to learn more about FHA loans!