4 Offers First-Time Home Buyers Can Take Advantage of

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4 Offers First-Time Home Buyers Can Take Advantage of

Emily Gojko · Jan 6, 2010

So, you’re taking the plunge from renter to buyer? First time home buyers have many great offers out there for them to take advantage of. It is, however, important to point out what a first time home buyer is.

As defined by the United States Department of Housing and Urban Development, more commonly known as HUD, a first time home buyer is anyone that has not owned a home within the last three years. Consequently, if you are re-entering the housing market, you may also qualify for one of the great offers out there for first time home buyers.

1- A Tax Credit is Available to First Time Home Buyers

The Worker, Homeownership, and Business Assistance Act of 2009 allows for a tax credit of up to $8,000 for qualifying first time home buyers. Specific income limits and sales dates apply, but if you do qualify, the tax credit is determined as 10 percent of the home’s purchase price, capped at $8,000. With most home purchase being greater than $80,000, it can generally be assumed that most people qualify for the full tax credit. The tax credit is then claimed on your income tax return.

2 – Government Grants Available to First Time Home Buyers

If you are a first time home buyer and your income falls below the median income for your area, this may be something worth checking out. For qualifying people in qualifying income brackets (which vary based on location), first time home buyers can obtain a government grant to put towards the down payment on a home. This means the government will give those people that qualify, free money to purchase a house. Full information on the various government grant programs can be found on the HUD’s website.

3 – Mortgage Financing Through Your State Is Available for First Time Home Buyers

Some states offer mortgage loans to first time home buyers that are below market fixed rate interest loans. One such state is New Jersey. Their program is offered through the State of New Jersey Housing and Mortgage Finance Agency. If you are a first time home buyer, it is worth it to investigate further if your state offers a state funded mortgage loan.

4 – Low Down Payment, Reduced or No Mortgage Insurance Loans for First Time Home Buyers

If you are a first time home buyer, you may be eligible for a low down payment, and/or reduced or no mortgage insurance loan (as such mortgage insurance may be required). As is the case with the government grants, there are income limitations. Generally, your income cannot exceed 80 percent of the median area income as determined by HUD. However, if you feel you fall into that category, these special loans should be checked out.

First Time Home Buyers Beware

Before jumping into any mortgage, make sure that you do your research. Many low interest mortgage require points be paid upfront, many low down payment mortgages require you to carry mortgage insurance, and many adjustable rate or interest only mortgages can get you in trouble if the market or your personal situation unexpectedly changes.

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Emily Gojko: I am a writer, marketer, and manager with a strong background in real estate development and management. I am also a native New Yorker with an obsession for home design shows, so I have personal and professional experience making the most of small spaces, and dealing with good and bad living situations.

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