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What Are The Benefits For First Time Home Buyers?

January 14, 2021

A piggy bank and Dollar bills representing a first time home buyers loan benefitsFirst time home buyers are often eligible for a first time home buyers loan, which most loan programs offer. The benefits of this loan type may include a lower down payment, reduced closing costs due to grants and forgivable loans, tax credit and more financial freedom. Learning more about the benefits of the loan program and the benefits it can offer can help you decide if pursuing one is right for you.

What is a First Time Home Buyers Loan?

A first time home buyers loan is a home loan offered to borrowers who are considered a first time buyer. This includes any adult who has never purchased a home, and many loan programs also define a “first time buyer” as anyone who has not purchased a home in the last three years.

To qualify for the loan program, the applicant must be a first time home buyer as well as meet all other requirements. The qualifications typically include the ability to make a minimum down payment, a minimum credit score and an ideal debt to income ratio. Some loan programs have additional requirements, such as having veteran status if you are applying for a VA loan or seeking to purchase a home in an approved USDA area for a USDA loan.

The Benefits for First Time Home Buyers

An illustration of house ,some coins and dollar bills on a blueprint signifying a first time home buyers loan benefitsA first time home buyers loan is designed to give first time buyers a financial head start to reduce the risk of home foreclosure or financial challenges brought on by increased closing costs or down payments. Understanding the benefits can help you determine if pursuing this kind of loan is appropriate.

The benefits of the loan program depend on various factors and are unique to each borrower. In addition, every loan program offers its own advantages. However, there are some more common benefits first time home buyers often receive, which includes a low or no down payment loan, reduced closing costs and tax credit.

Low or No Down Payment Loans

The most common type of a first time home buyers loan is one that offers a low or no down payment. This is a huge advantage for many buyers, especially those who may not have a lot in their savings account. The amount that is required for the down payment with the loan program depends on the applicant’s ability to meet other criteria. An applicant with a high credit score and low debt to income ratio is more likely to receive a low or no down payment loan.

In addition to the loan program, every state offers first time home buyers grants. Depending on the state, buyers may be eligible for a grant or forgivable loan to assist with the down payment cost if one is necessary for the home purchase.

Closing Costs

First time home buyer loans covers closing costs vary for each programMany first time home buyer loans and grants cover the closing costs, which is often three percent or more of the home loan. This can make homes more affordable for prospective first time buyers who may not have a large sum of money saved in their bank account.

The ways in which the loan covers closing costs vary for each program. For example, FHA offers a 203(k) loan that may help with necessary renovation costs by adding the amount into the loan. Perhaps more commonly, first time buyers are able to find closing cost relief through grants and forgivable loans for first time buyers.

Tax Credit

One of the most powerful incentives for many first time home buyers is federal and state tax credit. In some instances, the amount of interest paid on the loan is deductible with the federal government under certain loan programs such as FHA. While this may be a more complicated benefit to receive, looking into the possibility of tax credit with the loan program is certainly a good idea.

Financial Freedom

A first time home buyers loan offers financial freedom initially and long-term. Initially, the closing costs and down payment are often more affordable for the home buyers, and being able to create equity on your home through a mortgage payment (rather than rent payments) can offer long-term financial freedom, especially after you pay off the entire mortgage and own the home outright.

Contact The First Time Home Buyers Experts

Here at My Lending Pal, we help buyers secure the best mortgage loan possible to provide them with financial freedom as they start a new and exciting chapter of their life. Reach out to us by phone or email today if you would like to learn more about the benefits and how we can help you secure a home loan.

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MyLendingPal, Inc, NMLS ID #1734346, (www.nmlsconsumeraccess.org); Corporate Office: 5400 Laurel Springs Parkway, Suite 304, Suwanee, GA 30024. Georgia Residential Mortgage Licensee #61544. Principal Loan Originator: Ricky Merchant, NMLS ID: 1517056. Georgia License # 54264. For questions regarding state licensing, please contact (404) 433-8918. Not all products and options are available in all states. Terms are subject to change without notice. Any rates or terms are speculative only and can change without notice.
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MyLendingPal, Inc
MyLendingPal, Inc
5.0
Balachandar Sundaresan
Balachandar Sundaresan
17:30 23 Jun 20
Roger Merchant and his team were very helpful, right from getting a great rate to completing all process on time and being super responsive. Would happily recommend him!!
Dinesh Nair
Dinesh Nair
14:41 30 Jan 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Ramesh Kumar
Ramesh Kumar
02:03 17 Dec 19
I would really recommend Nations First Home Mortgage, if you are looking for the best home mortgage options. I was very much glad to work with this team and they have saved lot of time and money!!
gulshan rai
gulshan rai
03:21 17 Apr 19
I would highly recommend Mr Roger to anyone in the area looking for an amazing lender. He made the mortgage process so easy and effortless. I could tell him and his team were very attentive to all the details that came with applying for a mortgage and were quick to remind me of any deadlines that were approaching.It was super easy to work with Mr Roger.My special thanks to preeti who did an amazing job to get things done in the timely manner. If I had any questions, it was almost like she was waiting at her desk for my phone call to answer the questions immediately. The loans closed on time and without a glitch. I would highly recommend them to anyone
Ajith Nair
Ajith Nair
01:50 13 May 19
We highly recommend Roger for financing mortgage. Roger and his team were excellent through out the process and we had a very smooth purchase. They were always available when we had any questions. It was an amazing experience working with Roger and his team.
Pratul Patwari
Pratul Patwari
13:03 20 Jul 20
Roger Merchant and Priti Vin helped us in buying our first home. They understood our needs and took care of everything for us. They were very good with the communication through the process. They will always be my first choice in future for the mortgage services.
Sujatha Hariharan
Sujatha Hariharan
20:51 26 Jul 20
They were able to find me great rates. Service was quick and communication prompt. The loan process can be daunting as is the document gathering process but this was the easiest and quickest that I have experienced. Highly recommend!
Dinesh Nair
Dinesh Nair
15:53 30 Jul 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Manu Pushpanath
Manu Pushpanath
15:59 29 Jul 20
Great lender to work with. Right from document collection till closing they did it in 2weeks. The fastest closing I heard and get to experience myself. One improvement I suggest is it will be good if the closing attorney can come into the house for completing the closing. Considering current situation it will add a lot of value to the reputation. Thanks Milan and team for a good closing experience.
Sakthi S
Sakthi S
20:46 01 Sep 20
Would definitely recommend Roger and his team.Refinanced for the second time and with roger, I didn’t feel like I refinanced.The process was very smooth and fast.The rates were very competitive and it was amazingworking with Roger and his team.I’d recommend him for sure.
Sunny Patel
Sunny Patel
21:17 01 Sep 20
They were quick, courteous, and professional. They got me an excellent rate and helped make the process smooth. I would recommend using to my friends and family!
Emmitt Rathore
Emmitt Rathore
14:57 22 Dec 20
Roger helped us find an unbeatable rate!His decades of work in the industry made it easy for us to complete many processes with the lender, and helped us close on time!I will definitely be passing the good word around and recommending family and friends to him.I look forward to our next real estate transaction with them.
M Alamoti
M Alamoti
01:02 11 Jan 21
I had the experience of using their service. They know what they are doing. They are very honest, professional and caring. I have no doubt and hesitation to recommend them to anyone who is looking to purchase a home. I am very pleased for their service.
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