If you’re looking to buy a new home, even if you’ve already been a homeowner, you may actually be able to qualify as a first time homebuyer. It sure doesn’t make sense on the surface, but depending on your circumstances, your may qualify as a first time homebuyer despite the fact that you’ve owned before.
What this means is you can potentially cash in on some first time homebuyer deals for your new mortgage. “How?” you may ask. Let’s dig a little deeper into what exactly a first time homebuyer is.
What is a First Time Homebuyer?
To start with, a first time homebuyer may be someone who has never owned a home as you probably suspected; however, according to Fannie Mae, even previous homeowners may be considered first time homebuyers if they meet some specific criteria.
Fannie Mae is one of the major government mortgage investors and has a great deal to do with setting the standards for home buying, home ownership, and the basic rules governing such things. As such, Fannie Mae has set the governing rules of what exactly defines a first time homebuyer.
3 Years of Non-Ownership
Even if you’ve owned a home in the past, you may qualify as a first time homebuyer if you haven’t owned a home in 3 years or longer. There are some stipulations, though. The home you’re purchasing must be your primary residence and you must not have had any joint ownership in a home in the previous 3 years.
Additionally, in the situation that you’re buying a home with your spouse, then you as individuals are treated as separate borrowers. For example, if you’re a first time homebuyer but your spouse has owned a home, then you would qualify together as first time homebuyers.
You’ve Waited Following Foreclosure
Foreclosures and short sales can wreak havoc on your credit and put you and your family in a bind in a number of ways, but these circumstances aren’t unforgivable. As a matter of fact, you can actually leverage your former foreclosure status in the form of being a first time homebuyer provided you’ve fulfilled your waiting period.
In most situations, anywhere from four to seven years of waiting will qualify you to purchase a home again in which case, you would be considered a first time homebuyer according to Fannie Mae. While each circumstance is different and each loan type will require different waiting periods, it’s important to check your waiting period status with the Federal Housing Administration, Freddie Mac, and Fannie Mae.
Benefits to First Time Homebuyers
First time homebuyers, according to the Federal Housing Administration, get certain benefits if applying for FHA loans. FHA loans generally come with lowered or zero downpayment requirements and often have lower credit score requirements.
These simpler loan approval criteria can be especially advantageous for those who may be coming off a credit damaging event such as a foreclosure or short sale. The lower credit requirements mean you don’t have to have your credit completely rebuilt in order to qualify for an FHA loan. The additional benefit of lowered downpayment requirements can also help get you back into a home without a 100% financial recovery.
Get Pre-Qualified as a First Time Homebuyer
No matter whether you’re a FIRST first time homebuyer or if you’ve owned before, Tidewater Mortgage Services, Inc. can help you get pre-qualified and help you find the right mortgage solution to take advantage of your first time buyer status. Apply online and you could get pre-qualified in as little as 24 hours!