Homebuyer Homebuying

7 Benefits of a First Time Home Buyer

Taking out a mortgage to buy a home for the first time can be as scary as it is exciting. After all, there are so many unknowns – and it is likely to be the biggest investment you have made in your life thus far. While you navigate these waters and determine what it is you are looking for in your future home, there are a few benefits of a first time home buyer that you will not want to miss.

So, who is considered a first time homebuyer? It can depend, but it is usually defined as someone who has never owned a home before. But that’s not all. First time homebuyers can typically be considered as those who have not owned (or co-owned) their principal place of residence anytime within the last three years.

What are the Benefits of a First Time Home Buyer?

Below are seven benefits of a first time home buyer that you won’t want to miss out on!

1. Take Advantage of First Time Home Buyer Programs

When you are a first time home buyer, you get to take advantage of some really helpful programs. This includes being able to get approved for a loan if you have a lower credit score or even less money to put down as a down payment – two things that often prevent many people from becoming homeowners.

Purchasing a home is not something everyone can do easily. Yet, everyone should have the opportunity. With these programs, one of the benefits of a first time home buyer is the ability to take advantage of owning a home by getting a little extra help along the way.

2. More Lenient Qualification Requirements

While lenient qualification requirements come with many first time home buyer programs, it is important to focus on their role in helping individuals purchase homes. Having a good or excellent credit score is often necessary to secure a mortgage. However, not everyone has been able to maintain their credit over the years – and this can easily lead to a denied application.

Another common thing that lenders take into consideration is the debt-to-income (DTI) ratio of the buyer. This is the percentage that tells lenders how much money you will spend on paying off debts versus the amount of money you have coming in for income. Many mortgage companies require a certain DTI in order to qualify for a loan, but first time home buyers can take advantage of more relaxed requirements when it comes to this.

3. Down Payment Assistance

As mentioned above, coming up with large amounts of money for down payments can be tough, too – and not something everyone can do. One of the benefits of a first time home buyer is that you may not have to worry about it. There are programs available that may provide you with grants or forgivable loans that provide you with down payment assistance. They may even cover your closing costs too.

Keep in mind that there are many different programs that are offered by local and state housing authorities. Each program has a different set of qualifications, so if you don’t qualify for one, you may qualify for another – so always do your due diligence.

4. No More Rent Payments

Rent payments can add up over the years – and tenants are left with nothing to show for all they have spent. Not to mention that in many places, landlords have the opportunity to raise the rent each year, and they can choose not to re-rent the space when the lease is up. As a result, tenants are often left without any stability for the future.

When buying a new home as a first time home buyer, you gain access to monthly mortgage payments that are predictable. And each payment you make is going to go toward building the equity in a home that is yours.

5. Owning an Appreciating Investment

A home’s value will change over time. If you invest in a property as a first time home buyer, there is a good chance that your home will be worth more in the future. Everything you put into your home can boost its value – which means the money is never spent for nothing (much like a rent payment).

Without opportunities such as first time home buyer programs, many new homeowners will never have the ability to hold such an asset.

6. Protection For Your Future

Getting older and not having a place of your own to call home can make you a bit nervous. And rising rents combined with near-stagnant social security income once you retire can leave the future with a lot of unknowns.

One of the best benefits of being a first time home buyer is that it’s an investment in your future. As you own it, it can begin to appreciate over time. Then, as you get older and have more invested in the property, it can be a great benefit. You may even pay it off and no longer have a mortgage payment which will be great news. Or, should you decide to downsize, selling your home that has appreciated will bring you a great reward. This additional money can become a nest egg for your future.

7. Potential Tax Benefits

The IRS offers tax deductions for those who own their own home. In other words, it gives an incentive for individuals – and first time home buyers – to take that step. The type of tax deduction, as well as how much the deduction is, will vary. The key is to know that when you invest in a home, you are potentially having a positive impact on your tax return which can result in savings each year. 

Think about how this can add up over time!

Reap the Benefits of Being a First Time Home Buyer

It is not uncommon for some individuals to think that they can’t become homeowners for one reason or another. The more you can learn about the options available and the benefits of being a first time home buyer, the greater chance of success you will have when it comes to getting the new house keys in your hand. 

There are so many opportunities for those that have not previously owned or co-owned their home. At Option Funding Inc in Westlake Village, we can provide you with loans for down payments, lower down payments, more lenient debt requirements, and even lower credit scores. Call us today and see what we can do for you!

By Ahmad Azizi, Branch Manager at Option Funding, Inc.

Ahmad worked as an underwriter for several years where he developed a passion for sales and quickly learned the ins and outs of the mortgage industry.

He has been a Loan Officer for over 20 years and the Top Producer at Option Funding for the past 10 years.

His commitment to his clients is unprecedented and he understands the importance of helping his borrowers achieve exceptional results in their home buying experience. In his spare time, Ahmad enjoys spending time with his wife and three children.

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