Pennsylvania Home Buyer

Washington County First Time Home Buyer Program

Nice house with sold signThe Redevelopment Authority of Washington County has made buying a home in Washington County easier for qualified home buyers. Who couldn’t use up to $4,500 to purchase a home? That’s right. Up to $4,500 in closing cost assistance is available to individuals and families purchasing a single family home in Washington County. The amount borrowed will be determined by actual, reasonable, and documented closing costs.

The closing cost assistance grant is a 5 year forgivable loan. Twenty percent of the assistance loan is forgiven for each of the first 5 years and then terminates. Needless to say, if the house is sold during the first 5 years, the assistance loan will be prorated.

Prospective home buyers must qualify and be approved for a USDA (Rural Development 502 Direct Housing Program) first mortgage.

Eligible closing costs include, reasonable attorney fees for attorneys, credit reports, mortgage recording, termite inspections, title insurance, transfer tax, document preparation, notary, settlement/closing and other customary mortgage and closing fees.

Applicants must meet the annual household income mat not exceed 80% of the median family income for Washington County as defined by the Department of Housing and Urban Development; adjusted for family size. Home buyers must agree to occupy the home as their principal residence.

The applicant or applicants must be a first time homebuyer(s) which is usually defined as someone who did not own a home during the previous three years. Displaced homemaker or single parents can also be defined as first time home buyers; even if an applicant owned a home with his or her spouse or resided in a home owned by the spouse.

Prospective homebuyers are required to successfully complete a HUD approved homebuyer counseling program.

Washington County Home Buyer and Credit counseling Programs


What is the debt to income ratio for a mortgage?

Debt to income ratio is a percentage comparison of the monthly income to the monthly debt that an applicant pays out each month. For example, if the applicant earns $1,000 each month and he pays out $360 for a car payment and credit cards, the applicant has a debt to income ratio of 36%. To calculate the debt to income ratio, simply add up the monthly debt obligations (i.e. school loans, credit cards, car loan, etc.) and divide the total by the “gross” monthly income. Calculating the borrower’s debt to income is complicated and best left to a skilled loan officer to make the calculation because there are some variances when determining income and monthly debt. The previous explanation is called the “back end” ratio. The front-end ratio is comparing the mortgage payment to the monthly income.

Why is APR different from the interest rate on mortgage?

Annual Percentage Rate (APR) disclosure is required by the Federal Government to give the borrower an understanding of the cost of the loan and as a way to compare lenders. Apr is part of the Truth in Lending Act (TILA) that was signed into law in 1968. The APR formula is extremely confusing and is not the interest rate on the loan. The purpose of the APR rate is to inform the buyer of hidden costs. For example, lender A could offer you an interest rate of 5% and no out of pocket expenses. In this scenario, the APR rate would be zero, or close to it. But another lender could entice you with a 3% interest rate with $5,000 in closing costs. The APR formula might result in a 6% APR rate with lender B. So now when you compare lender A and lender B, lender A is a better deal because of the hidden charges associated with lender B's loan. Once again, the APR calculation is very confusing and the formula does change when comparing adjustable rate mortgages with fixed rate mortgages. For all of its faults, APR is useful in comparing mortgage loan offers.

Are any closing costs negotiable?

Some closing costs are fixed and non-negotiable, like transfer taxes. Pennsylvania, the municipality and school district will not negotiate a lower transfer rate. Title insurance in Pennsylvania is regulated and set by the Pennsylvania Insurance Commission, do not expect any reduced title insurance rates.

You may be able to get the settlement company to knock off (or reduce) some of their fees. Some mortgage lenders, if pressed, will forgive a few internal fees like processing, underwriting, etc.

How much does it cost to buy a house in Pennsylvania?

Use the PA mortgage calculator to estimate the down payment, closing costs and monthly payment for FHA, VA, USDA & conventional loans.Closing cost calculator

First time home buyer classes listed by county

Learn about Pennsylvania's home buying programs. Read more

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