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Is it becoming quite overwhelming to buy your own home finally? Are you afraid to make a wrong financial decision and suffer loss in the future? Worry no more!! There are numerous mortgage loans for first-time buyers which have flexible down payment terms and low closing costs. If you are planning to go for first-time homebuyer loan programs but are not sure of your eligibility, it is advisable to speak with a home loan advisor to make the right choice. In this guide, you will understand how to qualify for a loan as a first-time home buyer and what are the available financing options.
What does a first-time buyer mean?
As the name suggests, individuals who are buying a residential property for the first time are regarded as first-time home buyers. However, most governmental organizations have a strict definition of first-time homeowners, which includes the individuals who do not have ownership of any house in the past 3 years. This clarifies that even if you have bought a home 3 years ago or beyond, you still qualify for first-time homebuyer programs. Furthermore, you are also required to meet the eligibility criteria to get the home loans at preferable terms.
What are the eligibility criteria of a first-time home buyer?
Check out the below-mentioned eligibility terms to get first time home buyer loans:
1. If you are an owner of a rental or investment property and do not even live in it, you are still not counted as a first-time homebuyer.
2. Opting for government-backed home loans requires borrowers to meet certain higher safety standards before qualifying.
3. If your income is more than a certain mark, you may not be eligible. Check the income restrictions of your local and state government programs to be sure of your qualification.
What are the aspects to be considered while applying for a home loan?
1. Loan Tenure
The term of the loan is the total time the borrower will take to repay the loan amount along with the interest. Mostly the time duration of home loans is 30 years or 360 months to pay back the loan. However, the borrowers must note that if they plan to sell the property while the loan is still pending, the loan tenure and other criteria may vary. If you have decent savings in your bank account, you can make a huge down payment and pay lower EMIs over the course of 30 years of the loan lifecycle.
2. Rate of interest
Secondly and most importantly, interest rates are the price of the loan, and it is beneficial to negotiate the interest rates to be as low as possible. Interest rate is a small fee that the bank charges which shall be paid along with the principal loan amount. Using a free mortgage payment calculator is advisable to see the breakdown of the EMIS and decide your home loan affordability accordingly.
Check out the home loan eligibility terms minutely and connect with a home loan advisor to make mindful financial decisions!