Benefits for first time home owners

At We buy houses riverside, you will be taken through the various benefits that come with being a first time owner. They include the following:

Home in on HUD

The first place that you have to look for is HUD for grant assistance. Although the agency in itself doesn’t make grants for individuals, it gives grant funds which are earmarked for homebuyers who are first time to organizations which have a tax exempt status with IRS. The HUD website has all the details.

Look to your IRA

For every first time homebuyer, they are eligible of taking up to $10000 of portfolio earnings out of a Roth IRA or traditional IRA without the need to pay the 10% penalty for doing an early withdrawal.

The definition of the IRS of a first time home buyer is of a person who has never owned a personal residence for the past two years. It is not the same as the HUD which considers someone who is a first time buyer to be a person who has never owned a personal residence for at least three years.

It denotes that even if you owned a home in the past, you could be eligible to tap the funds for a down payment; closing costs or any other related expenses in case you are meeting the federal criteria. The first time home buyers exclusion only does exempt you from having to face the 10% penalty. You still have to pay income tax on the money which you withdraw from a traditional IRA, but the accounts for Roth IRA aren’t subjected to extra taxes.

Because the $10000 lifetime penalty free, withdrawal is per person, a couple will be able to withdraw a maximum of $20000 from their IRAs separately and then combine to be able to pay for their first home. You have to ensure that the money is used within the 120 days or it doesn’t become subject to the 10% penalty.

Size up state programs

Majority of states such as Ohio, Illinois, and Washington are known to offer a down payment assistance for the qualified first time homebuyers. The eligibility in such programs is normally based on income and might be limited to the price of the property which is being purchased. For those who are eligible, they might be in a position to receive financial assistance with the closing fees and he down payments and costs to improve or rehab the property.

Know about the option of the Native Americans

The Native American homebuyers for the first time can be able to apply for a section of 184 loans. Apart from the no money down VA loan, it could be the best loan offered which is federal subsidized. It is a loan that requires a 1.5% loan upfront guarantee fee and has only a down payment of 2.25% on the loans which are over $50000.

Unlike when it comes to the interest rates of the traditional loans, which normally are based on the credit score of the borrower, the loan’s rate is based on the current market rates.