Buying your first home can feel overwhelming, especially when you're trying to figure out which mortgage program is right for you. The good news is that there isn't just one type of “first-time homebuyer loan.”
First-time homebuyers in Michigan may qualify for many of the same mortgage programs available to other buyers, including conventional, FHA, VA and USDA Rural Development loans. Some buyers may also qualify for down payment or closing cost assistance.
The right option depends on your income, credit, available funds, the property you're purchasing and your overall financial situation. At @Home Mortgage, we'll help you compare the options and understand the differences so you can make an informed decision.
And you may be considered a first-time homebuyer even if you've owned a home before. Some programs define a first-time homebuyer as someone who has not owned a principal residence during the previous three years.
You may not need as much money as you think to buy your first home. A 20% down payment is not required for many mortgage programs.
Depending on the loan program and your qualifications, options may include:
Conventional loans: Some qualified first-time homebuyers may be eligible for financing with as little as 3% down.
FHA loans: Qualified borrowers may purchase with as little as 3.5% down.
USDA Rural Development loans: Eligible borrowers purchasing an eligible property may qualify for 100% financing with no down payment required.
VA loans: Eligible veterans, active-duty service members and certain surviving spouses may qualify for financing with no down payment required.
Down payment assistance: Some Michigan homebuyers may qualify for assistance with their down payment and/or closing costs. @Home Mortgage also offers @Home Access, our down payment assistance option designed to help qualified borrowers with up to 3.5% toward their down payment. Eligibility and program requirements apply.
The amount you'll actually need to bring to closing depends on more than the down payment. Closing costs, prepaid property taxes, homeowners insurance and other expenses can also affect the total amount needed.
Do I have to be a first-time homebuyer to qualify for a low down payment?
No. Some low-down-payment mortgage programs are available to both first-time and repeat buyers. However, certain programs, assistance options, or special loan features may have requirements specifically for first-time homebuyers.
What credit score do I need to buy my first home?
There isn't one credit score required for every mortgage. Credit requirements vary by loan program and lender guidelines. Rather than assuming your credit isn't good enough, it's worth having a lender review your complete financial picture and explain which options may be available.
How much money do I need to buy my first home?
The amount varies based on the loan program, down payment, closing costs, prepaid expenses, seller credits, and any assistance for which you qualify. Some buyers are surprised to learn that buying a home may require considerably less cash than they expected.
Can the seller help pay my closing costs?
Yes, many mortgage programs allow sellers to contribute toward certain eligible closing costs, subject to the rules and limits of the particular loan program.
Can I use gift money to buy my first home?
Many mortgage programs allow eligible gift funds to be used toward the down payment and/or closing costs. The source and documentation requirements vary by loan program.
Do first-time homebuyers have to use FHA?
No. FHA is only one option. First-time buyers may qualify for conventional, FHA, USDA Rural Development, VA, and other mortgage programs depending on their circumstances.
Can I qualify as a first-time homebuyer if I've owned a home before?
Possibly. For many programs, a first-time homebuyer can include someone who has not owned a principal residence during the previous three years. The definition can vary by program.
Should I get pre-approved before looking at homes?
Yes. A pre-approval can help you understand your price range, estimated payment, cash needed to close, and which loan programs may fit your situation before you begin making offers.
First-time homebuyers may be able to finance several different types of homes depending on the mortgage program and property requirements.
Eligible properties may include single-family homes, condominiums, manufactured homes, and certain 2–4 unit properties.
The property requirements can vary depending on whether you're using a conventional, FHA, VA, USDA or other mortgage program. Some programs also have specific occupancy, appraisal or property eligibility requirements.
If you're considering something other than a traditional single-family home, talk with us before ruling it out. We can help determine which financing options may be available for the property you're considering.
Buying your first home can feel complicated, but it becomes much easier when you know what to expect. We'll help you understand the financing side of the process from the beginning.
We'll review your income, credit, available funds, estimated payment, and financing options so you understand what you're comfortable spending—not simply the maximum amount you may qualify to borrow.
We'll help you compare loan programs that may be available to you, including conventional, FHA, USDA Rural Development, VA, and applicable down payment assistance options.
Your pre-approval gives you a clearer picture of your price range and helps you understand the estimated funds you'll need for your down payment, closing costs, and other expenses.
Once you're prepared and pre-approved, you can begin shopping for a home. When you're ready to make an offer, we'll help you understand how the price, taxes, insurance, and financing may affect your estimated monthly payment.
After your offer is accepted, your loan moves through processing, appraisal, and underwriting. We'll keep you informed about what's happening, what we need from you, and what comes next.
Before closing, you'll receive final information about your loan terms, payment, and funds needed to close. Then it's time to sign your closing documents and become a homeowner.
Our goal isn't simply to get you pre-approved. We want you to feel prepared for the decisions you'll make along the way.
