Buying your first home can be daunting, but with great advice, the support of a great real estate agent and a little research and preparation, buying your first home can be an exciting and happy experience. Check out this first time home buyer guide for resources and tips on how to prepare for this important life event, and how to access help financing it.
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- What are the Qualifications for First Time Home Buyers
- Is There an Income Limit for First-Time Home Buyers?
- What is the Minimum Credit Score Needed for a First-Time Home Buyer?
- First-Time Home Buyer Programs
- First-Time Home Buyer Loans
- First Time Home Buyer Grants
- How to Qualify for First-Time Home Buyer Grants
- How Much Should a First-Time Home Buyer Put Down on House?
- First-Time Home Buyer Down Payment Assistance
- Online First-Time Home Buyer Classes
- First-Time Home Buyer Classes in Nevada
- What are the First-Time Home Buyer Mortgage Rates?
- First-Time Home Buyer Tax Deduction
- How Do I Prequalify as a First-Time Home Buyer?
- First-Time Home Buyer Advantages
- Books for First-Time Home Buyers
What are the Qualifications for First Time Home Buyers
There is really nothing to stop any person from purchasing a home for the first time.
However, due to the considerable expense involved, borrowing much or part of the purchase price is generally required.
And most lenders, mortgage and loan programs do take the following factors into consideration:
- Credit score
- Debt to income ratio
- Percentage down payment made in cash
Is There an Income Limit for First-Time Home Buyers?
Income requirements for first-time home buyers can vary, but most lenders today look at the figure of between 28% and 35% of what’s known as an individual’s debt to income (DTI) ratio .
The debt to income ratio is a comparison between what a person earns each month, and what they spend to cover recurring debts such as auto or personal loans, credit card debt, or even the mortgage payment itself.
A 28% DTI means that 28% of your monthly income is used to service debt.
Income and debt to income ratio limits are determined through a thorough examination of personal financial records.
What is the Minimum Credit Score Needed for a First-Time Home Buyer?
The recommended minimum credit score needed to buy a home is generally between 600 or above on a scale of 900.
The higher your score the more likely advantageous terms will be offered.
Some programs target those with lower credit scores who wish to purchase their first home.
First-Time Home Buyer Programs
It pays to check around for local, state and federal first time home buyer programs.
In Nevada, first time home buyers may be able to get assistance from the Home is Possible (HIP) program, which has subdivisions dedicated to specific professions such as teaching.
First-Time Home Buyer Loans
There are several alternatives to conventional bank mortgages available for first time home buyers.
- Perhaps the best-known program is run by the Federal Housing Administration (FHA).
- The United States Department of Agriculture (USDA) also issues low-interest mortgages to low-income Americans who wish to live in non-urban areas.
- The Department of Veterans Affairs (VA) issues loans with up to 100% financing to qualifying military members, including first-time homebuyers.
- HIP Plus is strictly for first-time home buyers and qualified veterans. It combines down payment and closing cost assistance with a mortgage credit certificate that provides an annual break on federal income taxes.
First-time home buyers in Nevada who meet income and other eligibility requirements can get 30-year mortgages at competitive interest rates through Nevada’s Home Is Possible loan and assistance programs.
First Time Home Buyer Grants
In Nevada, The Home Is Possible program gives first-time and repeat home buyers up to 5% of the loan amount to pay the down payment, or closing costs or a combination.
The money doesn’t have to be repaid if you keep the home as your primary residence for three years or more.
HIP for Teachers is for licensed, full-time K-12 public school teachers in Nevada. It provides $7,500 for down payment and closing costs, which doesn’t have to be repaid if the borrower remains the home for five years or more.
Nevada Partners offers a series of grants to first time home buyers in
How to Qualify for First-Time Home Buyer Grants
The most important qualification for first time home buyer grants is being a first time home buyer. After that, different programs have different criteria.
To qualify for HIP grants, for example, applicants must have a credit score of at least 640, a household income below $98,500, be purchasing a home costing less than $484,350, and complete a homeownership class.
More generally, the following considerations will impact qualification for grant programs:
- Income limits
- Limits on home price
- The home buyer must be a primary residence in Nevada
- The home buyer must agree to remain at home for a period time.
- Minimum credit score, usually 640 or higher
- Program-specific requirements may apply
- There may be a fee to participate in the program
How Much Should a First-Time Home Buyer Put Down on House?
Conventional mortgages with a bank or financial institution generally require a 5% down payment.
For a government-backed program like the FHA mortgage, the minimum down payment is 3.5%.
Bear in mind that the higher the down payment, the less money needs to be borrowed.
First-Time Home Buyer Down Payment Assistance
A number of local, state and federal agencies and organizations offer first time home buyers help with down payments and closing costs, among them HIP, VA, Nevada Partners, and USDA.
Online First-Time Home Buyer Classes
There are many online resources for first time home buyers, including blogs and tip sheets. Courses that help you earn HUD or HIP certification (proof of eligibility for the first timer program) can be taken online as well.
Some are free of charge, while others ask for a small fee. Check out the following:
First-Time Home Buyer Classes in Nevada
Nevada Housing Division partners with several organizations to offer classes around the state.
- Women’s Development Center [http://www.wdclv.org/services]
- Community Services of Nevada [http://www.csnv.org/homebuyer-classes-.html]
- Chicanos por la causa [https://www.cplc.org/housing/counseling.php]
What are the First-Time Home Buyer Mortgage Rates?
Mortgage rates may be, but are not necessarily, higher for
Lenders look at a number of factors to determine mortgage rates, including credit history, payment schedule
First-Time Home Buyer Tax Deduction
Several agencies include tax breaks for qualified first time home buyers as part of their programs.
For example, in addition to loan and down payment assistance programs, the Nevada Housing Division provides eligible home buyers with a Mortgage Credit Certificate (MCC).
Through this program, buyers receive an annual federal tax reduction of up to 30% of the interest paid on their mortgage to a maximum of $2,000 a year.
Borrowers can claim the credit every year for the life of the loan as long as the home remains their primary residence.
How Do I Prequalify as a First-Time Home Buyer?
You can get pre-qualified, which gives you an estimate of how much a lender may be willing to lend based on your income and debts.
This can help get you into specific first time home buyer programs such as
Here the lender examines your finances and confirms in writing how much it’s willing to lend you on what terms. Having a pre-approval letter makes you look more serious to a seller and can speed the purchase process.
First-Time Home Buyer Advantages
The biggest advantage of buying a home for the first time is access to programs that assist with grants and loans that may lessen the financial burden and risk.
All levels of government are committed to getting Americans into their own homes, so there is a multitude of programs, incentives,
Be sure to ask your real estate agent for general advice and then research what’s specifically available for your circumstance and region.
Your Las Vegas Real Estate Team is here to help! Contact the Lori Ballen Team at 702-604-7739.
Books for First-Time Home Buyers
Whether your goal is to buy your first-time home buyer in Las Vegas, buy or sell
Don’t embark on your maiden voyage as a homeowner without the knowledge and expertise of an experienced real estate agent in your corner. Call 702-604-7739 now to learn more.