Buying your first home is exciting, but it can also feel overwhelming. These tips will give you deeper insight into the home-buying process and may help you transition from renter to homeowner with less stress.
Look at an FHA Loan
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). FHA loans are fairly popular because they allow you to buy a home with a smaller down payment. An FHA loan may even help you get into a new home with a down payment as low as 3.5 percent.
Consider Being a “Good Neighbor”
The U.S. Department of Housing and Urban Development, otherwise known as HUD, operates the Good Neighbor Next Door program to bring quality homeowners to revitalization areas of select cities throughout the country. If you qualify as one of the following, you could secure a discount of 50 percent off the listing price:
- Law enforcement officer
- School teacher (pre-K to 12th grade)
- Emergency medical technician
The only catch is that the home must remain your sole residence for at least three years. You can check the HUD website to search for available properties in your local area. Some homes sell quickly, so you may want to watch the listings daily.
Know Your Rights as a Veteran
If you currently serve in the armed forces or were discharged in good standing, you may qualify for special housing benefits as a first-time home buyer. Many veterans pass up significant savings because they aren’t aware of what the U.S. Department of Veterans Affairs now offers. In addition to possibly securing a VA home loan without a down payment, you might qualify for a grant that helps you build an adapted home or other types of mortgage assistance.
Focus on the Big Picture
Many first-time home buyers use the listing price of homes in their area as a starting point for their home search. They are later shocked when they realize that there is so much more to the cost of a home than the sticker price. Make sure to look at the big picture before deciding. There are other factors that must be considered.
Using a mortgage calculator online will show you all the factors that go into determining the full cost of a home, including homeowner’s insurance and property taxes. You can also adjust the down payment and interest rate fields to see how much of a difference small changes make.