First Time Buyer Mortgage
The misconception surrounding first time buyer mortgages is that they are suitable for every new homeowner. First time buyer home loans do offer property newcomers some key benefits but going with another mortgage plan may make more sense if you do not have a low income. First time buyer mortgages are subsidized to help the most needy get on the property ladder and that is usually people who have low to moderate income levels. In addition, people who have been searching for a home for the last three years can also qualify for a first time buyer mortgage. More....
First time buyer mortgage – pros
Where you live will determine which of the following benefits are available to first time buyers. Typically, a first time mortgage can offer borrowers:
- Grants
- Reduced lending fees
- Deferred mortgage repayments
- Subsidized interest
- A modest down payment
First time buyer home loans not only aid families needing a home but they also serve the community as a whole. Neighborhoods tend to prosper collectively when there are a large proportion of homeowners living in the community – improving both home values and the environment.
First time buyer mortgage – cons
First time buyer mortgages will have a limit to which you can borrow meaning the best properties in the nicest part of town may be off limits. The purpose of subsidized home loans is to provide housing to people on low to moderate incomes therefore the borrowing limit will reflect that demographic.
You will also disqualify from a first time buyer mortgage if you intend to buy to rent.
Other first time buyer mortgage pitfalls include:
- Early sale of your home may mean your forfeit some benefits.
- You could be liable to pay recapture tax for some of the benefits received.
- You may be restricted to certain mortgage plans, ie 30 year fixed rate mortgages.
Make yourself at home in our Forum and find out what everyone else in America thinks about mortgages. There is also our up-to-date News section for all the latest on personal finance. If you need help finding a provider or would like to review a company, please don’t go without checking out our A-Z directory.
