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First time home buyer programs in PA

houseBuying a home is exciting, overwhelming, and possibly frightening, because a home is more than just a house or condominium that you live in. It’s one more step in life’s journey. Homes are special places where children are born and babies take their first steps across the living room floor. Homes are where brides are carried across the threshold, and holidays are celebrated. Home is “where the heart is”.
Buying a home is called the American dream, and rightfully so. There are other benefits of homeownership.

According to Robert D. Dietz, author of The Social Consequences of Homeownership

1. Children of homeowners are likely to perform higher on academic achievement test and are more likely to finish high school. They also have fewer behavioral problems in school and are less likely to become pregnant as teenagers.

2. Homeowners are more satisfied with their lives and are happier. Homeownership is positively associated with physical, mental, and emotional health.

3. Political activity (voting, civic participation) is higher among homeowners than renters are. High level of neighborhood homeownership enhances property values. Source- NeighborWorks
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The home buying process can be confusing. You hear words like, escrow, tax prorations, deed transfer tax, and title insurance to name a few. The first step to homeownership is to gather your personal papers and step two is to be preapproved by a mortgage loan officer. The lender will want to see the following:

  • Income tax returns for the previous two years.
  • Paystubs for the previous 30 days.
  • All bank statements including IRA and 401K statements covering the previous 60 days
  • Divorce, settlement, and child support agreements.
  • Alimony, pension, retirement distribution, and social security;

In short, the loan officer will want to see all information that relates to income and debt obligation.

Why does the mortgage company and loan officer need all this information?


The reason is to determine the maximum amount of money that you can borrow. That does not mean that you have to borrow the maximum, but the lender wants to give you a lending range. The lender also needs to determine the different loan options for you. The FHA home loan is a great to finance a home with a low down payment, low cash to close, and a very low credit score. The USDA, VA, and conventional loans also have lending requirements. The amount of money you can borrow depends on your credit score, available cash for the down payment (if necessary), and employment. Lenders use a formula called debt to income to estimate the ideal monthly mortgage payment based on the loan program.

Preapproval (also call prequalification) requires an examination of your credit report and credit score. Even if you have credit blemishes, lenders can sometimes boost a credit score by instructing you to pay down or payoff some monthly bills. That’s another reason loan officers want to know the amount of available cash. Some loan programs are more accepting of poor credit.

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Does Pennsylvania have loan programs for first time homebuyers?

You bet. The Pennsylvania Housing Finance Agency (PHFA) provides mortgage money for first time homebuyers and non-first time homebuyers. PHFA also has a closing cost and down payment grant program. There are 67 counties in Pennsylvania and many counties either offer a home loan program and/or down payment and assistance grant program. Read more

How much does it cost to buy a house?

It all depends on the loan program, your credit score, and down payment. I created a buyer cost calculator to give you a good estimate of the total costs involved in the purchase a home.

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Additional Resources:

Interest Rates - See a listing of mortgage lenders and interest rates – View interest rates

Seller Assist - Seller can pay some or all of your closing costs – Read more

Pennsylvania Transfer Tax - Pennsylvania requires a "deed transfer tax" when the title of the home passes from the seller to the buyer. Think of the deed transfer tax is a sales tax on real estate. The cost to transfer ownership varies by PA County. Read more

What is a HUD home? A house that was financed with an FHA loan and is subsequently foreclosed on is called a HUD home. Read more

Pennsylvania Transfer Tax

Pennsylvania requires a "deed transfer tax" when the title of the home passes from the seller to the buyer. Think of the deed transfer tax is a sales tax on real estate. The cost to transfer ownership varies by PA county. Read more