A major division of the federal housing program is a specialized, subsidized financing available for first time home buyers known as First Time Home Buyers Loan. A large portion of the real estate market consists of such buyers, but most of them often don’t have the required amount for purchasing property. This kind of financing sees to it that the needs of such people are catered to. But it comes with its own rules, regulations and limits. To know more go through the rest of the article.
What it means:
Investing in property requires a substantial economic backing. And building up the required amount on one’s own takes years. Thus whether you’ve been on the work force for a couple of years and are looking to buy you’re first home or you maintain a family on a fixed income and are looking for the same, you can apply for such a credit plan. There are a few basic considerations involved in this scheme. These are:
- The client has to be looking for her/his first home i.e. prior to this she/he should not have owned a house of her/his own
- There can be some exceptions here like if you owned a house with your spouse and as a result of a divorce have lost out on it and are living on a reduced income presently, even then you can qualify for such a loan
- You can also be approved for this credit if you have been trying to purchase a house for not less than three years and have failed to do so.
- The amount of money you’re looking to spend on the property in question has to be within a prescribed limit
- The property you’re looking to buy would have to meet certain specifications and cannot be too expensive. Further, if you’re thinking of renting the property out to others, or using it for any other purpose than your own primary residence, then you’re not qualified for such credit. Thus, the property you buy with the help of this financing has to be your permanent residence and address.
The last two points stem from the chief rationale working behind the formulation of such a scheme i.e. to provide a stimulus to the economy, as such form of new housings are indicators of a growing economy.
Such credits can be obtained even from online sources like UnitedFinances.com. But before you decide whether to take this route you should consider the following:
I. Whether the house available under such scheme is the type of house you are looking for as your first home.
II. Whether you have the required down payment ready
III. Whether there’s a chance of you selling the acquired home before appropriate time, because if you do so, you might have to lose some benefits you received under the program in concern
There are a number of other considerations involved too like the time taken for closing the loan in concern being too long and the need for shouldering some recapture tax etc. It is best if you look into all your options first like the traditional mortgage loans along with these subsidized financing plans and compare the rate and flexibility offered by each. On the basis of this you can make an informed decision.