Your Guide to First-Time Homebuyer Programs

Buying a home is undoubtedly one of the largest, if not the largest, purchases you will make in your lifetime. With such weight on finding and buying a home, it’s typical to be nervous about homebuying or to not even know where to start. Thankfully, there are lots of resources and programs out there designed to help you for this specific purpose.

Many homebuying programs are tailored for first-time homebuyers. These programs are typically comprehensive and will cover the entire homebuying process, from your start of looking at homes to receiving your keys. But what is a first-time homebuyer program, and how can you tell it’s the right option for you?

Is Now the Right Time for a Home?

Before even diving into first-time homebuyer programs, you’ll want to ensure that buying a home is the right move for you. You’ll need to consider a lot of factors, such as:

• Your current economic status. Do you have enough saved for a down payment on the home, as well as closing costs and any additional fees? Would adding a mortgage significantly impact your overall debt?
• Your employment status. You’ll need to make your mortgage payments month after month, so you want to ensure you have a stable and sufficient income.
• The current housing market. Mortgage rates fluctuate greatly as demanded by the housing market. Keep your eye on these rates and note any trends that you may find. This knowledge could be very useful throughout your homebuying process.

These are just a few factors you should consider before entering into your homebuying journey. If you decide now is not the best time for you, don’t be discouraged! Keep becoming a homebuyer as one of your personal goals and build towards it.

What is a First-Time Homebuyer Program?

Fortunately, there are lots of programs available to first-time homebuyers that guide you through this major step. These programs are designed to walk first-time homebuyers through every step of the homebuying process, from mortgage pre-approval to receiving the keys to your new home.

If two people are buying a home together, and only one is a first-time buyer, you are still eligible as first-time buyers! So, “you” don’t have to be a first-time buyer if your co-buyer is. Your lender may have other requirements you must meet to qualify for this kind of program. Requirements will likely include having a certain credit score and debt-to-income ratio, as well as your ability to make a specified down payment on your chosen home. There may also be additional requirements such as completion of a homebuying education course or factors based on the state where you live.

You should absolutely take advantage of first-time homebuyer programs if you’re able to meet the requirements. Remember, these programs are designed for you and the agents will work alongside you to ensure you understand the process and all that goes with it. Beyond full service and assistance, you also may receive benefits and rewards for enlisting in one of these programs.

At American Heritage, our My CU Home Connection Program* is an excellent opportunity for first-time homebuyers. In this program, you’ll work with an experienced First Heritage Realty Alliance real estate professional. This agent will take you through the entire process, from finding different homes to closing on your dream home! As a first-time homebuyer, you’ll receive a $500 lender credit and non-title fees waived!**

Do I Need a Mortgage Preapproval?

A pre-approval is an important step in the lending process, and especially so when it comes to a mortgage. Lenders will have more confidence in providing funds to you if you have a mortgage pre-approval. This tells them that you can make a down payment on a home and make your monthly payments.

Mortgage preapprovals also allow the lender to specify the amount of money you’re approved to borrow and your interest rate. But how exactly do they determine these amounts? In addition to your credit score, lenders will evaluate the following for a mortgage preapproval:

• Proof of employment: Lenders will want to see your paystubs from at least the last month, as well as contact information from your current and/or recent employers. Many companies have employment verification contact methods which you can supply to your lender. 
• Tax returns: You will need to give your lender your tax return documents from the last two years, including your W2 forms.
• Bank statements: Your lender will need to see bank statements for the last two months from all of your accounts, including checking, savings, and money market accounts. You’ll also have to provide statements from 401(k), IRA, or certificate accounts, if they apply to you.
• Additional income: If you receive any added income from Social Security, bonuses, or child support, this will need to be evaluated.
• Loan statements: If you currently have any other loans, your lender will need to see statements from the previous two months.
• ID: You will also need to supply a form of ID, like a driver’s license, Social Security card, or state ID.

Finding the Right Real Estate Agent

You want to have confidence that you’re working with the right real estate agent when looking for your first home. There are a variety of factors you should look for when meeting with real estate agents. Some common characteristics you should seek include:

• Knowledge of the local market. You want a real estate agent who knows the neighborhoods you are looking for homes in, and one who can answer any questions you may have.
• Experience and a track record of success. Your real estate agent should have a proven base of clients who have successfully purchased (or sold) homes with them.
• Communication and negotiation skills. Throughout the homebuying process, the real estate agent acts on your behalf and represents you. It’s crucial to have someone who represents your wishes and will advocate for you in the negotiation process.

With My CU Home Connection*, the real estate professionals with First Heritage Realty carry all of these traits. You’re absolutely in the right hands when working with them.

*My CU Home Connection™ is available to you through a participating credit union membership. Cash Rewards are available to members who register to use My CU Home Connection™ and who use a qualified real estate agent in the My CU Home Connection™ network to buy or sell their home. It is not a requirement to use any or all of the service provider partners in order to earn the realty cash rewards. Cash rewards amounts are dependent on the commissions paid to the agent. The credit union may have specific rules on how cash rewards will be paid. Cash rewards are void where prohibited by law or the lender. Please consult with your credit union for details that may affect you. Account with a minimum balance of $15 to be eligible.

**Title benefit available for homes purchased in Pennsylvania and New Jersey.