While these loans have definitely made it easier for buyers to purchase a home, there are some downsides to these types of loans that Bergen County buyers should be aware of.
Today, I’m going to tell you about the advantages and disadvantages associated with first-time home buyer loans.
First-Time Home Buying on the Bergen County, NJ Real Estate Market
As you may know, a first-time home buyer loan is one that offers financial assistance to qualified home borrowers by using a number of strategies, including:
- Zero to low down payments
- Subsidized interest costs
- Forgive loans
- Defer payments
Generally speaking, those home buyers who have not owned a home before are good candidates for these types of loans.
In addition, those who have not owned a home in more than three years also qualify.
While these loans are a great way to get your foot in the door, there may be some restrictions associated with it.
Some of these stipulations may be:
- You’re not allowed to buy homes in higher price ranges
- You must make the newly purchased home your primary residence
- You’re not allowed to rent the newly purchased home to others
- The home must meet a certain physical standard, such as have no egregious safety issues.
Because of these stipulations, there are definitely some disadvantages to first-time home buyer loans, including:
- Buyers are limited to the type of home they want by price range
- Buyers may not be eligible for certain program benefits if they sell their home too soon
- Buyers may not have many loan types from which to choose
- Buyers may have to pay for recapture taxes in exchange for some of the benefits they receive through the program
While these types of loans are perfect for those people who may not be able to purchase a home any other way, it’s not the only option out there.
In some cases, it may be better for you to go with a traditional loan.
Every case is different, of course – which is why it’s so important to work with an experienced Bergen County REALTOR to discuss the options.
Investing in a Bergen County, NJ Home for Sale
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Until next time,