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If financing your first home seems a daunting undertaking, never fear. With good guidance, you can afford the place of your dreams.
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The cost of utilities can be a big factor in buying a home. Talk to the owner about average year-round costs, and ask to see some sample bills from various seasons.
Most people buying homes now using one of government loan programs from the Federal Housing Authority, Veterans Administration or, in rural areas, the United States Department of Agriculture. Required home down payments vary according to each program.
FHA requires 3.5 percent of the selling price down. USDA and VA don’t require any. If you’re going the conventional route, your down payment can be as little as 3 percent, but only if your credit score is above 680, Thomas notes. Closing costs are estimated at 4 percent of the purchase price. They may be covered by the seller in the sales price.
Under the recently enacted Housing and Economic Recovery Act, first-time homebuyers can get a federal tax credit of 10 percent, up to $7,500, of the purchase price of a home bought before July 1. IRS Delaware representative Gregg Semanick describes the credit as “much like a 15-year interest-free loan.”
Depending on your income, first-time buyers may qualify for assistance from the state and federal governments with mortgage rates, down payments and closing costs. Delaware’s Single Family Mortgage Revenue Bond Program, also known as the First-Time Home Buyers Program, can arrange for mortgage financing at below-market rates or provide an “assisted loan” of 3 percent of the mortgage amount to put toward a down payment or closing costs. The state’s Second Mortgage Assistance can provide you with an additional $10,000 to put toward those costs. Detailed information about both programs is available at destatehousing.com.
To learn more, see delawaretoday.com/Delaware-Today/Delaware-Bride.
