Granting Your Wish: First Time Home Buyer Programs to Check Out

Granting Your Wish: First Time Home Buyer Programs to Check Out
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In 2016, there were 1.8 million first time home buyers. How do they do it?

If you're looking to get into your first home, it can be exhausting, intimidating, and stressful.

But there are several first time home buyer programs that help you get into your dream starter home. They make the home buying process easy and practical.

Here are some of the best programs, and how to buy your first home.

The Origin of the 20 Percent Deposit

First, let's debunk the 20 percent deposit rule. Where did it even originate? Is it practical or necessary?

Undoubtedly, if you're looking to buy a home, someone has said that you need a 20% deposit.

The 20% deposit rule was popularized by Dave Ramsey. It's the minimum amount you need to put down on a new home to avoid mortgage insurance.

Why does that matter? Mortgage insurance doesn't protect you. If you have 20% down, it's completely unnecessary.

For Dave Ramsey and people who follow them, mortgage insurance is only a waste of money.

So How Much Do You Actually Need?

If you want to dodge mortgage insurance, you need a 20% down payment. For a $150,000 starter home, that's $30,000.

If you're trying to pay off student loans and credit card debt, saving that much money can seem impossible. Does it look like you might get your first home by the time you're forty?

But that doesn't have to be the case. As we mentioned, some programs help first time home buyers get into their starter homes. And you only need a 3% deposit.

You'll have to pay for mortgage insurance of course. But that means you can become a homeowner for as little as $4,500 for that same $150,000 starter home.

What is Mortgage Insurance?

Mortgage insurance is something your primary lender will require you to have and pay for.

It protects your lender if you default on your mortgage. The insurance company pays back your mortgage, and your bank keeps the house.

So, it doesn't help you at all. That's why many people save up the full 20% deposit for their new home.

Various factors will affect your mortgage insurance rate. Factors include your credit score and the length of the mortgage. They'll also consider how many people are on the mortgage contract.

To get a good estimate, check out this calculator here.

More programs can help you get financing and help you get a loan.

HUD Good Neighbor Next Door Program

Are you a law enforcement officer, firefighter, teacher, or EMT? Good news! You could be eligible for the HUD  Good Neighbor Next Door Program.

With this program, you're eligible to receive up to 50% off the price of your home if you stay there for at least 36 months.

You must purchase a home approved by the program. These homes are in areas that the program has marked for revitalization. Don't worry though – they're still nice houses.

USDA Loans

If you imagine a rustic country lifestyle, you should look into getting a USDA loan. These loans are only available for people looking to move to a rural area. So check to make sure your property qualifies.

The program has specific requirements you need to meet to be eligible. But you don't need a down payment to participate.

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Veteran's Administration Loans

If you served in our country's military branches, you're eligible for a VA loan. The best part of these loans is they require no down payment at all. It makes it easy for you to become a homeowner during or after your service.

Also, look into Adapted Housing Grants. If you have a disability-related to your service, you may be eligible for one of these grants. They make it easier to afford a house with amenities to make living with your disability easier.

Local Programs

Many states and counties have their own local programs for first time home buyers. These vary from state to state and county to county, so you need to look up the specifics for your area.

But these programs can help you get into your dream home sooner than you expected.

So when you're looking at homes for sale, see if there are local programs to help you afford it too.

Looking to Live in New York?

Quontic Bank has a first-time homebuyer program for the state of New York.

You open a savings account with Quontic Bank for your first home in New York State. For every dollar you save, you get four dollars to match it, up to $7,500.

The caveat is, of course, you need to get your mortgage through Quontic Bank too. But if you want to live in New York, that's a free $7,500 for your down payment for your starter home.

FHA Loans

The FHA loan is one of the easiest loans to qualify for. With a credit score of at least 580, you only need 3.5 percent of a down payment for your home.

Even those with a credit score as low as 500 are eligible, just so long as they have 10 percent to put down.

First Time Home Buyer Programs Make it Easy for Anyone to Become a Homeowner

These first time home buyer programs can help you get into your starter home. You can have a new home ahead of schedule with little or no down payment. If you want to stop throwing your money towards rent and start investing it in your own home, see if you're eligible.

Your dream starter home is right around the corner. Keep checking back for more great tips to make your life great.

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