Author Topic: First Time Home Buyer. Options? Grants?  (Read 546 times)

maz_phil

  • 5 O'Clock Shadow
  • *
  • Posts: 22
First Time Home Buyer. Options? Grants?
« on: April 15, 2019, 08:26:54 AM »
Hello Mustachians,

I am hopefully going to be buying my first ever home. I am looking at different options for myself both in terms of mortgages and possible grants/benefits for first time home buyers. I am looking to get a home in Virginia, and I make under $70k a year (with no spouse). The home is a single-family HUD home priced just over $115k and I would want to live there while renting out the other bedrooms.

I have looked at an FHA loan with 5% down as an option because I have heard that it can remove the mortgage insurance over time. I have also heard that the FannieMae HomeReady program could be beneficial (although, I have recently seen some negative reviews). Additionally, I believe there are some VHDA grants for $2,500 for someone in my income bracket. Do you have any input on good first-time buyer options? Any experience with this yourself or any sort of advice you would like to contribute? I am all ears (or eyes)!

rothwem

  • Pencil Stache
  • ****
  • Posts: 591
  • Location: WNC
Re: First Time Home Buyer. Options? Grants?
« Reply #1 on: April 15, 2019, 09:21:20 AM »
Hello Mustachians,

I am hopefully going to be buying my first ever home. I am looking at different options for myself both in terms of mortgages and possible grants/benefits for first time home buyers. I am looking to get a home in Virginia, and I make under $70k a year (with no spouse). The home is a single-family HUD home priced just over $115k and I would want to live there while renting out the other bedrooms.

I have looked at an FHA loan with 5% down as an option because I have heard that it can remove the mortgage insurance over time. I have also heard that the FannieMae HomeReady program could be beneficial (although, I have recently seen some negative reviews). Additionally, I believe there are some VHDA grants for $2,500 for someone in my income bracket. Do you have any input on good first-time buyer options? Any experience with this yourself or any sort of advice you would like to contribute? I am all ears (or eyes)!

Unless something has changed recently, FHA PMI doesn’t go away unless you refi, which is a $2-3000 process.

maz_phil

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: First Time Home Buyer. Options? Grants?
« Reply #2 on: April 15, 2019, 09:47:48 AM »
Oof. I was under the impression if you did a 5% rather than standard 3.5% FHA that the mortgage insurance eventually falls off? I guess I was mistaken. Do you have any recommendations as far as options?
Hello Mustachians,

I am hopefully going to be buying my first ever home. I am looking at different options for myself both in terms of mortgages and possible grants/benefits for first time home buyers. I am looking to get a home in Virginia, and I make under $70k a year (with no spouse). The home is a single-family HUD home priced just over $115k and I would want to live there while renting out the other bedrooms.

I have looked at an FHA loan with 5% down as an option because I have heard that it can remove the mortgage insurance over time. I have also heard that the FannieMae HomeReady program could be beneficial (although, I have recently seen some negative reviews). Additionally, I believe there are some VHDA grants for $2,500 for someone in my income bracket. Do you have any input on good first-time buyer options? Any experience with this yourself or any sort of advice you would like to contribute? I am all ears (or eyes)!

Unless something has changed recently, FHA PMI doesn’t go away unless you refi, which is a $2-3000 process.

rothwem

  • Pencil Stache
  • ****
  • Posts: 591
  • Location: WNC
Re: First Time Home Buyer. Options? Grants?
« Reply #3 on: April 15, 2019, 10:06:34 AM »
I would avoid FHA if you can.  You get a low downpayment and better rates, but you pay an upfront mortgage insurance premium of 1.75% of the loan amount at closing in addition to the PMI every month. 

I would aim for a conventional 30 year fixed loan, and the bank doesn't really matter since your mortgage will probably be sold in a year or two anyways to a different bank.  Try to get the lowest interest rate that you can, and don't do PMI if you can avoid it. 

tralfamadorian

  • Handlebar Stache
  • *****
  • Posts: 1213
Re: First Time Home Buyer. Options? Grants?
« Reply #4 on: April 15, 2019, 02:13:39 PM »
Since it's a HUD home, I would check to see if it qualifies for the homepath readybuyer program.

I would also google first time home buyer assistance programs for your county or city to see if there are any currently going.

August26th

  • 5 O'Clock Shadow
  • *
  • Posts: 80
  • Location: Beautiful Colorado
Re: First Time Home Buyer. Options? Grants?
« Reply #5 on: April 16, 2019, 03:31:01 PM »
Current FHA rules state that you’d need to put more than 10% down in order for the mortgage insurance to be cancellable beginning in year 11. With anything less than 10% down, you’re paying mortgage insurance for the life of the loan.