Is there a good website for house grants? Or help for first time buyers?

Question

I was told that there are programs out there that can help out first time buyers financially. Please steer me in the right direction.

Answer 1

There are many programs for first time home buyers. Your first step is to figure out your financial situation. A good rule of thumb is 1.5 times your gross annual salary = mortgage. For example, if you make $50,000 gross annually you would look for a house that was $75,000 or less. This will give you a rough idea of how much house you can afford. There are all kinds of brokers who will tell you higher figures, but the reality is that unless you have a substantial downpayment (which it does not sound like you do), you will be in over your head with monthly expenses. So many people are getting over financed these days, and end up in foreclosure.

Second step is to find a Realtor. A good Realtor will work with you to find the right home, within your financial means. Then, will steer you toward the programs available. They will vary from location to location. There are even programs to help with repairs that may be needed to homes that you purchase.

I bought my first house for around $300 out of pocket. The county paid my downpayment. It showed as a silent second mortgage. Everything else was financed.

So, my advice to you would be to find a Realtor. Don't expect to find the right house the first day or even the first week. I looked at houses for almost 4 months before I bought my first one. Happy house hunting!

Answer 2

There are actually quite a few organizations that give gift money to first time buyers. What you have to be aware of though is that many of them are not actually giving you a gift. The money they give you is actually rolled into your mortgage. Which is not a good thing because when you're given the key, you will actually owe more on the house than you could possibly sell it for.

My favorite gift program is through GMAC. You can get information from their website. Theirs is a "true" gift. In other words, the money they give you is used in the same manner as if you pulled it out of your pocket. Their only stipulation is that you remain in the home for 10 years and do not refinance during that time. If you sell or refinance, then you repay the money on a reducing scale as years pass. After 10 years, it's no longer an issue.

So, the first thing you need to do before setting out on this venture is to go talk to a lender. Research lenders and read about their gift programs, decipher whether they are really gifts or just loans. Then get a pre-approval in your hand. Of course most folks are approved for more than they can actually afford, so you will have to sit down and crunch the numbers and decide what is reasonable for your income.

After you have your pre-approval, then find a realtor and a house.
One note of advice though, do not tell your realtor how much your pre-approval is for. They want to make as much money as they can on each sale, and if they have that knowledge, they will show you homes at the top end of your approval. You set the price with them and stick with it.