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Advantages of Being a First Time Home Buyer

As a first time home buyer, the process of buying a home can be intimidating. There are many things that you have to consider, from finding the right neighborhood to financing.

Fortunately, being a first time home buyer also comes with many advantages. Here are some of the top advantages of being a first time home buyer to help you save time and money when you buy your first home.

First Time Home Buyer Real Estate Programs in California

Assistance for first time home buyers is almost always available if you know where to look for it. The California Homebuyer’s Downpayment Assistance Program (CHDAP) is a deferred-payment junior loan that is available to first time home buyers in California. The loan is available for up to 3% of the purchase price, or the appraised value, of the home.

New homeowners can use the loan to cover the downpayment or closing costs. This loan can also be combined with a first mortgage loan to provide first time homeowners with the help that they need to buy their primary residences.

Although HUD doesn’t make loans directly to individual borrowers, it does grant funds to various California organizations to assist first time home buyers. HUD maintains a full list of first time home buyer programs that are available to California home buyers.

FHA Loans

The Federal Housing Administration (FHA) offers FHA loans to first time home buyers. These loans only require a downpayment of 3.5%. The fact that you have been approved by the FHA can help to convince lenders who feel uncertain about your loan qualifications to grant you a mortgage if you have been previously turned down by banks.

Tax Deductions for First Time Home Buyers

For 2015, first time homeowners can claim the costs of PMI as a deduction for both primary and secondary residences. Private mortgage insurance (PMI) protects the lender in the event that you default on your mortgage loan. For first time home buyers, PMI is frequently a required condition for mortgage loan approval, especially if the homeowner is unable to make a large downpayment on the home.

The Mortgage Credit Certificate Tax Credit Program (MCC) is another federal credit that California home buyers can use to convert a portion of their annual mortgage interest into tax credits, reducing tax liability.

By taking advantage of the numerous deductions and programs that are available to first time home buyers, you can make owning your first home much more affordable. If you would like to learn more about the benefits that are available to first time home buyers, get in touch with us today at  (805) 212-1058 or send an email to contact@cimarealestate.com to schedule your free consultation.