First-Time Homebuyers May Qualify For Up To $8,000: All The Details

Buying your first home can be exciting, but upfront costs can be overwhelming for many prospective first-time buyers. Fortunately, New American Funding’s Pathway to Homeownership initiative can help make the homebuying process easier and more affordable.

What Costs Do I Need To Account For When Buying A Home?

When purchasing a home, there are certain upfront costs — which vary depending on location and loan or program specifics — that buyers must consider. One-time or upfront costs include:

• Down payment — The average buyer will make a down payment of roughly six percent to seven percent of the home’s purchase price — however, loans can go as low as zero percent down.
• Closing costs — Homebuyers are responsible for most closing costs, or fees like homeowner’s insurance, appraisals, and inspections that are paid to third parties and lenders when you purchase your home. These fees run around two to six percent of the loan amount.
• Moving — While moving yourself is cheaper, homebuyers can still expect to spend around $2,500 for a local move — or more if they have a lot of items or are moving long distances.

In addition to one-time costs, homebuyers can expect to encounter recurring costs, including:

• Mortgage payments — The national median for monthly mortgage payments, or payments made towards your home loan, is $1,672. This includes both the principal — the amount borrowed to purchase your home — and interest.
• Property taxes — Property taxes, which are paid annually or twice annually, currently sit at a national average of 1.08 percent of one’s property value.
• Homeowners and hazard insurance — On average, homeowners insurance costs $1,784 annually. Hazard-risk pricing varies based on the risk factors, including earthquakes and flooding, in the area in which your property is located.
• Mortgage insurance — You’re required to have mortgage insurance if you put down less than 20 percent on a down payment; however, once home buyers reach a 20 percent threshold for their home equity, mortgage insurance is no longer required. Mortgage insurance costs anywhere up to about two percent of the loan’s yearly amount.
• HOA/co-op/condo fees — Buyers who purchase a co-op, condo, or home in a planned development will incur additional fees. These costs can include HOA fees, which come in at a national average of $331 per month — although many homebuyers are likely to encounter higher prices due to inflation.
• Utilities and maintenance — On top of taxes and insurance, homebuyers need to account for utilities and maintenance fees — including gas, home internet, and electricity — which are likely to cost at least $450 per month.

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What Is The Pathway To Homeownership Initiative?

Although buying a new house is expensive, New American Funding is helping make homeownership accessible through its Pathway to Homeownership initiative, which can help offset costs and bring you peace of mind.

The program provides up to $8,000 to qualifying buyers in select areas to help pay for things like closing costs and down payments. First-time buyers of any income level can qualify if they purchase a one-unit, single-family home and have a credit score of at least 620. This program can be combined with other down payment assistance (DPA) programs and offers down payments as low as three percent.

To learn more about how to qualify for the Pathway To Homeownership initiative, contact a New American Funding loan officer for eligibility information and to answer any questions you may have.

Pathway Loan Options: Numerous loan options are available for new homebuyers looking to take advantage of the Pathways program. The most popular option, the 30-year fixed-rate loan, provides affordable monthly payments and a stable way to finance a home or refinance an existing mortgage while remaining protected from market changes.

Another option is the Seller-Paid 2-1 buydown, which gives borrowers a two percent lower payment rate (than the note rate) on a new loan during the first year. For the second year, they get a payment rate of one percent lower. Similarly, a Seller-Paid 3-2-1 buydown offers borrowers a three percent lower payment rate on a new loan during the first year, followed by a two percent lower rate for the second year, and a rate of one percent lower on the third year.

If you’re interested in reviewing the different loan types available to new homebuyers, New American Funding makes it easy to explore all the options. You can even use the company’s online mortgage calculator to help you budget for your dream home.

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New American Funding’s Programs Make Homeownership Accessible For All

The Pathway to Homeownership initiative is just one of many New American Funding offers to help everyone achieve their dream of homeownership. Other options for potential homebuyers looking to begin their journey include:

• NAF Cash — NAF Cash*, an affiliated company of New American Funding, will buy your dream home with a cash offer, then sell the property back to you at the original purchase price, plus a small fee. This allows for a quicker closing process and the ability to buy a new home before you sell your old one, all while competing as a cash buyer and potentially saving money.
• RE Home Connect — New American Funding partners with RE Home Connect to connect buyers with qualified real estate agents in their area. With RE Home Connect, pre-qualified and pre-approved buyers are matched with top-notch local real estate agents who will leverage their extensive network and knowledge to make the road to homeownership easier than ever.
• 5 Year Rate Protection Pledge — The 5 Year Rate Protection pledge allows borrowers to purchase or refinance their home now and lock in rates for five years. If rates drop within that time frame, buyers can refinance at a lower rate with no additional lender or appraisal fee.
• Buydown Loan — A Buydown Loan starts borrowers at a lower payment rate on a 30-year loan for the first three years at no additional charge. New American Funding offers four buydown loan options: 1-0 Buydown, 3-2-1 Buydown, 2-1 Buydown, and 1-1-1 Buydown. These options save homebuyers money each month with lower payment rates for the first few years of home ownership.

With all these funding programs available to new home buyers, it’s no wonder that New American Funding ranks highly in customer satisfaction. In 2022, New American Funding was recognized as #1 in customer satisfaction among mortgage servicers by the J.D. Power 2022 U.S. Mortgage Servicer Satisfaction Study. The company was able to achieve this prestigious recognition through its dedication to helping every client from every background achieve homeownership.

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Prospective first-time home buyers who are ready to get started on their homeowner journey can turn to New American Funding for help. Contact one of New American Funding’s knowledgeable Loan Officers to get started today.

*NAF Cash is fulfilled by NAF Cash LLC, an affiliated real estate company of New American Funding that is managed and operated in compliance with applicable legal and regulatory requirements. NAF Cash LLC does not originate loans or issue loan commitments. Terms and Conditions apply. Not available in all states. MI Real Estate Broker #6502431375. 41050 W 11 Mile Rd, Suite 220, Novi, MI, 48375. Phone 844-344-0531

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