First Time Home Buyer

What a First Time Home Buyer Who Purchased a Home and Now Struggling Should Expect

For a first time home buyer who purchased a home only to find they lost their job or had a decline in income, it can be extremely stressful.? It?s taxing for any homeowner, first time home buyers or not.? So what can you do if you are unemployed and behind on your home mortgage?

Good news is finally here for those that are unemployed or now underemployed due to today?s economic conditions.? Help can be found for those struggling to avoid foreclosure.? April 2011, the announcement was made that unemployed/underemployed homeowners can now receive loans that will help them avoid foreclosure, thanks to a new program by the Obama administration. After delays and efforts to terminate the program, the $1 billion Emergency Homeowners Loan Program is now ready to help these homeowners continue to make payments on their mortgages.

Emergency Homeowners Loan Program (EHLP) ? What is it?

For qualified homeowners, the program will allow zero interest loans of up to $50,000 for up to two years.? If the homeowner remains living in the home 5 years; remains current in their monthly mortgage payments and meets other program requirements, no payment is due on the EHLP during those 5 years.? If homeowners meet these conditions, the principal balance due on their EHLP loan shall decline in equal portions of 20% annually, until the note is extinguished.

Qualifying for the Program

Requirements include being at least three months behind on your mortgage payments, but also showing a reasonable ability to resume payments within the two year period.? Also, homeowners must have had at least a 15% decrease in income, but must have been able to pay their mortgage ?prior? to the drop in income. Qualified applicants cannot own a second home and the property must be their primary residence.? Program funds are not limited to the first time home buyer struggling; all qualifying homeowners can seek relief.? You can find all specific program requirements on HUD?s website.

States Currently Included in the Program

Included in this latest emergency relief effort are Puerto Rico and 32 states that are not otherwise funded by the US Treasury?s Innovation Fund for Hardest Hit Housing Markets program.? Each state has different amounts allotted to them for relief, for a complete list of states eligible for this program check HUD?s website for the EHLP loan program.

For states not currently included in the program, coming soon is the nonprofit NeighborWorks America, which is to provide federal funding for loans in other states that do not currently have a similar program.? According to the Department of Housing and Urban Development, they expect at least 30,000 homeowners to participate in the program.

Treasury Department Aid

Some of the hardest hit states effected by the economy such as California, Nevada, Michigan and a few others, are expecting to receive some aid through the Treasury Department, which has allotted $7.6 billion for assistance for states impacted the most.

Moving Forward

If you?re one of the many people who owns a home but has fallen behind in payments, you may be able to find help in one of the above programs and avoid foreclosure.? Whether you are a seasoned or first time home buyer homeowner struggling financially, the new announcement on the above relief programs are worth checking into.? For more information, you can go to HUD?s website and type EHLP into the search bar.

For a first time home buyer it can be scary purchasing your first home if you don?t know what to expect.? You?re already aware of the two main steps you need to take; finding a home you want to purchase, and then getting a mortgage loan to finance it.? What you may not be aware of is all the steps in between, and this is the part that can be intimidating and stressful if you?re not prepared for it.? This is intended to provide an overview of what most first time home buyers should be prepared for when purchasing a home for the first time.

The Initial Phase ? Know ?YOU?

When you are buying a home for the first time, it?s easy to have plenty of doubts and make choices based on your emotions.? It?s important to take your time and not rush.? Buying a home is one of the biggest investments you?ll make and can be a life changing event. Know what you want, examine your life situation, your finances and any other factors that will have an impact on buying a home.

Know Your Credit History

Understand what your credit report is showing and know your credit score.? Almost all lenders today will include the credit score when underwriting a loan for approval. Lenders credit criteria will vary, but a low credit score or too much negative credit will result in a loan denial from the majority of mortgage lenders for a first time home buyer.

The Real Estate Agent and Finding a Home

Using a real estate agent is wise, there?s too much at stake to go it alone when buying your first home. ?Find an honest agent that will work with you to locate homes that fit your budget and have the majority of features you are looking for.

Decide on What Type of Mortgage and Get Pre-Approved

First, there are a tremendous amount of home mortgage loans available today, so you?ll need to decide on which loan is best for you.? Deciding on which type of loan, the length of the term (years) and the type of mortgage rates (fixed or variable) are important decisions, since it will be you paying back the loan.? Regardless of which loan you choose, make sure the payment is comfortable for your budget.? There?s nothing that will kill the excitement of buying a home quicker than realizing shortly afterwards that the payment is a struggle.

Get a pre-approval on the loan.? This will give you leverage with the real estate agent and the seller; both are willing to negotiate more when they know you are a ?real buyer?, and nothing says that louder than having a mortgage already approved.

Home Inspection

This is a step NOT to skip over.? A home inspection costs approximately $300 in most areas, and is well worth the peace of mind. ?If you?re not a building contractor and unable to detect structural, electrical and other major elements that could cost a substantial amount of money, you could move in and become ?house poor?, don?t bypass the inspection.

Finalizing the Process

Be prepared for closing.? Make sure you have all necessary requirements fulfilled, like the homeowners insurance; down payment; closing fees not included in the loan; any prepaid items or anything else the lender says is required to close; and have them well in advance of the closing date.

Mortgage.org offers loans designed for the first time home buyer. We can make it easier, that?s what we do. Contact us today!