Bergen County real estate is booming and many first-time home buyers are anxious to purchase their dream home in one of New Jersey’s most attractive counties. However, applying for a first-time home loan is understandably intimidating to those new to the real estate industry and its complicated rules and regulations. Knowing some key facts about loans that are specifically designed to assist qualified home buyers invest in a Bergen County home can help relieve the uncertainty about applying for a first-time home loan.
What First-Time Home Buyer Loans Offer
- Minimal to zero down payments
- Deferred payments
- Grants
- Subsidized interest costs
- Preference for buyers who have never owned a home or have not owned a home in the past three years
Be aware that some loans may also have restrictions that include:
- Potential buyers may not be allowed to purchase homes in the higher-end price range
- If a home is purchased using a first-time loan, the buyers must make the home their primary residence
- Renting of a newly purchased home may be prohibited
- The home must pass a safety/physical inspection before the loan can be approved
If applicable, these restrictions mean that home buyers are barred from purchasing high-priced homes. In addition, buyers may find that they are ineligible to receive certain benefits associated with a first-time home buyer loan if they choose to sell the home within a year or two of purchasing it. Finally, payment of “recapture” taxes may be implicated in exchange for program benefits provided by first-time home loans.
Advantages of a Conventional Home Loan
For potential real estate buyers who do not like the restrictions involved with a first-time home loan but who want to live in charming Bergen County, applying for a conventional home loan provides the advantage of not having numerous stipulations. For example, a conventional home loan does not require that you make the home your primary residence, nor does it restrict you from renting the home. Additionally, most traditional home loans have lower interest at fixed rates. This means that your monthly mortgage payment will remain the same until you sell the house or pay off the loan.
Because conventional home loans are not backed by a government agency, lenders may eliminate some fees associated with the loan process, allow buyers to employ additional collateral when applying for the loan and even fund some closing costs at a higher interest rate if the borrower is short of cash.
For more information about Bergen County real estate opportunities and home loan options that can make living in a beautiful, spacious home a reality, contact Orly-Chen today for quick and courteous assistance.