Often, new homebuyers receive conflicting information. Their friends tell them one thing, their family tells them another, and they aren’t really sure what to expect. This all leads to a lot of anxiety and confusion.
One matter that first-time buyers often get confused about is new homebuyer programs. Today, we’re going to shed some light on this topic. Below, we’ve explored some of the most common myths surrounding first-time buyers’ programs.
Debunking New Homebuyer Program Myths with Facts
There are many rumors about first-time homebuyer programs and not all of them are true. As you begin this new journey, it’s important to have factual information so you know exactly what you’re getting into. Here are some of the most common new homebuyer myths.
Myth: You Have to Put 20% Down
One common myth is that new homebuyer programs require you to make a 20% down payment. This information is false. Yes, you can put down 20% if you choose, but it’s not always required.
In fact, there are some programs that allow you to put down as little as 3.5% or even zero down. Really, it all depends on what your lender requires and the type of loan you’re applying for.
Myth: You Don’t Need a Paper Trail for Cash Deposits
Another common myth is that paper trails do not matter for cash deposits. This is the farthest thing from the truth. Lenders care a great deal about your financial stability. For this reason, they’re going to want to know all the details about every source of income you have. This includes any cash income.
Myth: All First-Time Buyers are Eligible for Special Grants
Some people believe that first-time buyers can claim special grants. These grants can either lower their mortgage payments or help them come up with funds for making a down payment. This idea is somewhat of a myth, but also partially true.
Specific programs assist eligible new homebuyers in certain ways. But they have specific conditions and requirements, and not everyone is eligible for them.
In fact, eligibility criteria can vary by state, loan type, and housing location (i.e., rural vs urban). Also, some programs are reserved solely for buyers with low to moderate income.
The best way to know if you are eligible for any special grants or incentives is to check with your lender.
Myth: You Can’t Buy a Home While Paying Student Loans
Having student loans, or any type of debt for that matter, does not automatically disqualify you from being able to participate in any type of new home buyer program. Lenders want to know that you manage debt responsibly, so having debt isn’t necessarily a bad thing. What they want to see is that you have decent credit, a relatively low debt-to-income ratio, and steady income.
Looking for More Information about New Homebuyer Programs?
If you want to learn more about new homebuyer programs, just give us a call! We will be happy to answer any questions you may have and help you explore your financial options.
