First Time Home Buyer Loans NC FAQs

Are you tired of hauling the laundry down to a dark basement, or better yet, LIVING in your PARENTS basement?  Maybe it’s time to buy a home for yourself!

We’ve heard all of the doubts from folks who think, I am just able to save a LITTLE bit of money renting – HOW am I going to afford Home Ownership? The good news is that there are First Time Home Buyer Loans available in NC – that make it possible to buy a home with less than $1000.

Question:  How Much Money Do I Need To Buy A Home in NC?

We’ve helped folks buy homes with as little as $500.  Nice homes.

The truth is that there are many great programs for folks who want to buy a home in NC and don’t have a ton of Cash. All of these loan programs allow the Seller to pay your closing costs, and we can help you and your Real Estate Agent structure the contract to include Seller Paid Costs.

Additionally, Steve and I almost never quote the best mortgage rates with an Origination fee.  We do our best to give you a mortgage closing cost scenario that requires very little of your hard-earned cash.  If you have extra cash – and you want a lower rate with higher fees, we will gladly quote that option too.

FHA Home Loans:  Requires only a 3.5% down payment.

• If you qualify for the NC Housing Advantage program, you can have 3% of that amount provided by the State in the form of a forgivable First Time Home Buyer Grant.
• The ENTIRE Down Payment can come from Gift Funds
• You can borrow all or part of the down payment money from your IRA
• You are allowed to sell an “asset.”  We’ve had clients sell their grandmother’s silver, Bass Boats and one client recently sold an Indian Motor Cycle.  There are special documents we will need for all of these types of situations, so talk to us before going out and selling your car on Craigslist to make the down payment.

USDA Home Loans:  Requires No Down Payment funds – property must be located in a more rural section of NC and the Household Income must be below the maximum set for the County.

VA Home Loans:  Requires No Down Payment funds from qualifying Veterans.

Conventional Loans:  Generally Requires a 3% Investment.  That’s right, the rules changed, and you don’t have to bring 5% to closing!!   PLUS they NO LONGER must be from the Borrower’s Funds!  In the past we had to “source” funds in a borrower’s account for at least 90 days for a Conventional Loan, and borrowers were advised to get their gift of a down payment “ahead of time.”

That’s not longer required.  The whole 3% can be a gift.  Additionally, you can also sell an “asset” for your 3%. We recently had someone cash a Life Insurance Policy to cover the down payment. As long as the Down Payment is from the sale (cashing) of an asset that you own, and we can document that, we can use that money.  There are also very low PMI Mortgage Insurance Rates available!

You can ALSO use a 3% First Time Home Buyer GRANT to buy a house!

Where we’ve had trouble in the past, it’s usually from folks who keep cash in a safe deposit box.  There are those who just don’t report income, and happen to have $7000 or more “on hand.”

This is NOT an acceptable source of down payment (unfortunately).  Again – remember that we do NOT report large deposits, and gifts to the IRS.

Question: Are There Any More Mortgage Tax Credits For First Time Home Buyers?

YES!  First Time Home Buyer Loans come with Mortgage Tax Credits for those who qualify.  You need to be under the maximum income limit for the area you are purchasing a home in, and the sales price of the home can not be more than $225,000.

If you qualify for the maximum Mortgage Credit Certificate (MCC) then you could receive approximately more than $160 a month in additional income from reduced taxes, to cover the expense of owning a home.  This income does NOT mean that you give up your Tax Deduction for the Interest when you file your taxes each spring.

This is not a ONE TIME benefit – and there are no hidden costs associated with the Mortgage Tax Credit, meaning you  don’t owe money if you pay the home off a short time after you buy it.  You will continue receiving the Mortgage Tax Credit for as long as you continue living in the home with this mortgage in place.

Not all Banks offer this program – we do!

Remember that every rent check you write, builds up the Equity Bank Account for someone else.  You are paying for something you will never own.  With mortgage rates at all time lows – in most cases, Buying a home is more Affordable than Renting!

If you want more information about First Time Home Buyer Loans in NC – please call Steve and Eleanor Thorne, 919-649-5058.  We are Mortgage Lenders in the Raleigh NC area – and we specialize in First Time Home Buyer Loans / mortgage loans across our great State!