If you have dreamed of becoming a home owner, 2013 could be your year to make that dream come true. Mortgage interest rates are low, making purchasing a home more affordable than ever. What many first time buyers don’t realize is that when interest rates are low, your monthly mortgage payment can be the same or less than a rental home payment. The difference is you own the home and the interest you pay is tax deductible, where rental payments offer no tax benefit. This can save you even more money on a yearly basis as you can get more money back on your tax return.
First Time Home Buyer Programs in 2013
If you are considering purchasing a home in 2013 here are some loan programs that can save you money and help you buy a home:
• FHA Home Buyer Programs – With the FHA your down payment can be as low as 3.5%. On a $200,000 purchase price your down payment would be only $7,000. This is available on homes with 1 to 4 units, so you could even use this program to purchase a duplex to live in.
• FHA Fixer Upper Loan – Your first home may not be your dream home at first. If you fall in love with a fixer upper, the FHA has loan programs that can roll the cost of fixing the home into your loan.
• Down Payment Assistance Programs – Some cities and states offer down payment assistance programs for first time home buyers. If you can qualify for a home loan and afford the monthly payment, but haven’t saved up enough money this could be the solution for you.
• Mortgage Insurance – You can secure a conventional mortgage, backed by Fannie Mae and Freddie Mac, without putting 20% down. A mortgage insurance premium will be included in your monthly mortgage payment – This insures the lender in the event that you potentially default. This gives lenders the confidence to issue you a loan with a lower down payment.
• VA – Veterans can benefit by purchasing a home using a VA home loan program. The VA guarantees a portion of the loan, which allows lenders to offer up to 100% financing. You still have access to low interest rates and keep money in your pocket.
Interest rates make a huge impact on your monthly payment. Mortgage rates are low right now and you can save hundreds of dollars a month by purchasing now over a few years ago. Waiting to purchase a home doesn’t make sense when it could force you to pay hundreds more on your monthly payment due to rising rates and rising home values. The housing market is on the way up, new construction has increased, and more jobs are coming on the market. All of these factors contribute to a housing market that is improving.
Before you start looking at houses contact an FHA approved mortgage lender, and a VA approved mortgage lender if you are a veteran, to get pre approved. Your mortgage banker can tell you how much you can afford based on your income and credit information. With a pre approval in hand you can confidently shop for your dream home, knowing what your monthly payment will be.