So, you’ve decided to buy a St George home. Good for you. As a first-time homebuyer, you invest in yourself. Instead of paying someone else’s mortgage, you’re creating equity with every passing month. With a 30-year fixed-rate mortgage, your mortgage payment never changes. Come tax time, homeowners receive tax deductions that renters do not. And you can do whatever you want to your home (barring any issues with your HOA, if applicable).
What is a First-Time Homebuyer?
A common misconception about first-time homebuyers is that they haven’t owned a home before. Did you own a St George home back in the real estate boom of the mid-2000’s? Was it repossessed later? Been renting ever since? As long as you have not owned a home in the last three years, you are considered a first-time homebuyer.
Most Common Types of Home Loans
FHA – FHA loans are backed by the Federal Housing Administration. With an FHA loan, St George buyers with a credit score of 580+ could qualify with just 3.5% of the purchase price as a downpayment. If your credit score is lower, you may have to come up with 10% down. Some loan companies may require as little as 1% down, with 2% contributed by the lender towards your down payment. Certain restrictions apply.
VA – Are you a veteran? You may want to consider a VA loan. As long as you served in the military and were not dishonorably discharged, you qualify. No minimum credit score or downpayment required. Also, VA loans don’t require PMI (private mortgage insurance) like other conventional loans do when buyers borrow more than 80% of their purchase price. This helps keep payments down. Homes purchased through a VA loan must meet certain standards before they can be considered.
Fannie Mae/Freddie Mac – These are government-sponsored loans for low to moderate income homebuyers. These loans require as little as 3% down for a home purchase. Up until July 2017, Freddie Mac allowed as much as 2% of the downpayment to come from gifts or grants. However, beginning on November 1st, 2017, they require the entire 3% to be made up of the buyer’s own funds. After the 3% is accounted for, the buyer can then use any gifts or grants they receive to add to the downpayment.
Downpayment Assistance for St George Homebuyers
In 1975, the Utah government established a program to help low and moderate income Utah families purchase a home in the state. This program is called Utah Housing. When it comes to purchasing a home, many St George homebuyers only think about the downpayment. However, closing costs can run another several thousand dollars. If you fall short of funds for the downpayment and closing costs, Utah Housing might be able to help you.
Through the Utah Housing program, a qualified buyer can borrow up to 6% of the purchase price to help cover the downpayment and closing costs. They require a credit score of at least 620. You must meet FHA qualifications (get started on pre-approval for that right away). This must be your primary residence, not a rental property. And, you are allowed a co-signor if needed. For Washington County buyers, your household income cannot exceed $49,900 for a two-member household or $59,900 for families of three or more. The purchase price for a home must be no higher than $278,400. For more information, contact the Utah Housing Corp at 800-344-0452.
Talk to your St George REALTOR@ regarding which programs you may qualify for as a first-time homebuyer. They might even be able to put you in touch with a lender to help you as well.
For more information on this and other St George homes for sale, please visit my Featured Listings page.