Essential Tips for First Time Home Buyers to Make Your Purchase More Affordable
June 12, 2024
Stepping into the world of homeownership is a monumental milestone. For first time home buyers, this journey is both exciting and daunting, filled with dreams of a new space and the complexities of financing that space. The good news is, being a first time home buyer comes with a suite of benefits designed to make the process more affordable and accessible. Let’s dive into how you can leverage these first time buyer tips to turn your homeownership dream into a reality without breaking the bank.
1. Lower Down Payment Options
One of the most significant barriers to homeownership is the hefty down payment. However, first time home buyers often qualify for loan programs that require significantly lower down payments compared to conventional loans.
Conventional Loan Programs
Certain conventional loan programs designed for first time home buyers offer down payments as low as 5%. This is a game-changer if you haven’t been able to save up a large sum or if you want to keep some savings in reserve for future home improvements or emergencies. At Kearny Bank, eligible applicants can take advantage of our first time home buyer program, which provides access to lower down payment options, without a private mortgage insurance penalty.
2. Lender Paid Private Mortgage Insurance (PMI)
PMI is typically required by lenders when a borrower makes a down payment of less than 20%. This insurance protects the lender if you default on your loan, but it adds to your monthly mortgage payment. Luckily, some first time home buyer programs can eliminate this additional cost.
Programs With Lender Paid PMI
Some lending programs for first time home buyers are structured to avoid PMI, even with a lower down payment. This can save you hundreds of dollars annually, reducing your overall monthly expenses.
3. Down Payment Assistance Programs
Many states and local governments offer down payment assistance programs specifically for first time home buyers. These programs provide grants or low-interest loans to help cover the down payment and closing costs.
State and Local Programs
Each state and many cities have unique programs, so it’s worth researching what’s available in your area. For example, some programs offer forgivable loans that don’t have to be repaid if you stay in the home for a certain number of years.
Ready to Find the Perfect Home?
Being a first time home buyer opens up a world of financial benefits and assistance programs that can make the dream of homeownership more achievable. From lower down payment options and lender paid PMI to down payment assistance and lower credit score requirements, there are numerous ways to make buying your first home more affordable. Take advantage of these hacks, do your research, and reach out to local resources to unlock the full potential of these programs.
To get started on your homeownership journey, connect with a Kearny Bank mortgage advisor today. We’re here to help you navigate the first time home buying process and find the best solutions tailored to your needs. Happy house hunting!