First Time Home Buyer Grants

If you are buying a home for the first time, you should know that you could benefit from a government grant that can save you quite a lot of money on the purchase. However, since you are not the only person applying, the competition is quite high. Therefore, you will need to ensure that you are among the first people in line for the grant and that you have submitted all the necessary paperwork along with your grant application.

Keep in mind that no grant is going to fund your entire purchase, thus you will be required to have an additional money source. In most cases, your creditor will need to be a co-signer on your application, testifying that he will provide you with the rest of the necessary income. Since the number of grant requests is overwhelming, the government will not take into account the applicants that cannot offer proof of being able to pay the rest of the money.

Where to start your search
The HUD site can provide you with the necessary information regarding the grant programs in your area, thus you should start your investigation there. While the website offers you the possibility to narrow the search by choosing only grants available for your city, you should take the time to read all the offers thoroughly. Additionally, keep in mind that a person qualifying for a certain grant may not meet the requirements for another one. Therefore, before applying for any grant, you will need to understand the exact terms and conditions of the application and assess whether it suits you or not.

Necessary conditions for receiving approval
Since the grant will not usually cover approximately 10% of the total purchase, you will have to meet the necessary conditions for a mortgage loan before you qualify. Additionally, if you obtained the federal grant, HUD will require you to participate in a course regarding the options, benefits and responsibilities that this type of loan implies. This course should not be seen as a chore, since all first time buyers will learn a great deal of information. Additionally, you will find out the basics of managing your finances and the paperwork necessary for obtaining a homebuyer’s loan. Overall, these courses will give you a better chance of finding an affordable and convenient mortgage loan and of managing your debts properly.

Deciding on the right grant program
The main criterion that you should base your decision on is the amount of financial support that the grant can offer. However, since the legislation regarding this kind of program is different for every state, you should inform yourself of all the conditions of the contract. For example, in some states, you will be required to reimburse the grant once you decide to put your house up for sale. Therefore, make sure that all conditions and clauses are checked before signing a contract.

At the same time, all your decisions should follow a thorough research process of the available alternatives. The HUD site will make it easy for you to compare the first time homebuyer grants that you qualify for, but making the right decision is your job. If you lack the necessary experience in financial matters, there is no shame in asking for the advice of a professional real-estate counselor.

What you should avoid
While there are some additional benefits for first time homebuyers with a less than average income, they will only be able to purchase cheaper homes. Therefore, if your income is less than 80% of the average income, applying for a grant and taking a mortgage loan may not be the best idea. Additionally, your fixed rates will be low, thus you will end up paying the loan for at least 30 years, which is far from a pleasant perspective. If this is your case, you should wait until your financial situation ameliorates before considering the first time homebuyer’s grant and mortgage.

Another thing to be mindful of is the contract stipulations about selling your home in the near future. In most cases, you will lose many of the grant privileges if you choose to put your home for sale before a certain period.