Posted on: 15th Feb, 2007 03:11 pm
I owned a townhouse back in 1995 and sold it five years later. Am I still considered as first time home buyer when applying for an equity loan?
A person who buys property for the very first time is considered as a first time buyer but you had purchased a townhouse few years back. As such you will not fall in that category.
Technically, you still are if you have not financed a property in the last three years. If you look at page 3 of the 1003(loan app), there is a questions that asks if you have owned real property in the last 3 years - this relates directly to Fannie Mae's and Freddie Mac's definition of a first time home buyer.
That would be yes, guest.
That would be yes, guest.
I don't think you will be regarded as the first time buyer.
It is a matter of semantics. From a lending perspective, you would be treated the same as someone who has never owned a home before because you haven't owned in over 3 years. From a common-sense perspective you aren't a first-time homebuyer.
The more interesting question is why you would care if you are or are not a first-time homebuyer. Furthermore, if you don't own a home how could you take out an "equity loan" as you put it in your original post?
In order to take out an equity you must own a home. So now there's a catch 22. You can NOT be a first-time homebuyer and take out an equity loan because an equity loan requires you own a home.
Ok, now my head is spinning...
The more interesting question is why you would care if you are or are not a first-time homebuyer. Furthermore, if you don't own a home how could you take out an "equity loan" as you put it in your original post?
In order to take out an equity you must own a home. So now there's a catch 22. You can NOT be a first-time homebuyer and take out an equity loan because an equity loan requires you own a home.
Ok, now my head is spinning...
Hi Ken,
Sorry, it was my mistake to say equity. I meant a mortgage loan for a new house that I am buying.
Like you said, if it would not make any difference from a lending prospective.....who cares.
Thanks for your clarification : )
max
Sorry, it was my mistake to say equity. I meant a mortgage loan for a new house that I am buying.
Like you said, if it would not make any difference from a lending prospective.....who cares.
Thanks for your clarification : )
max
Now I get it....thanks max.
I would like to fine-tune my answer here. There are a few programs which are ONLY available to "first-time" homebuyers. Therefore by being designated as one, you have slightly more options then someone who is selling a home prior to buying a new home.
In some select cases there are loan programs that you would NOT be eligible for as a first-time homebuyer. (purchasing an investment property with no money down and no income documentation comes to mind).
However, if purchasing a primary residence you are in good shape. Now just find a loan officer you feel is giving you good advice and is competent and pick out the best loan program!
good luck.
I would like to fine-tune my answer here. There are a few programs which are ONLY available to "first-time" homebuyers. Therefore by being designated as one, you have slightly more options then someone who is selling a home prior to buying a new home.
In some select cases there are loan programs that you would NOT be eligible for as a first-time homebuyer. (purchasing an investment property with no money down and no income documentation comes to mind).
However, if purchasing a primary residence you are in good shape. Now just find a loan officer you feel is giving you good advice and is competent and pick out the best loan program!
good luck.
Hi Ken,
Please help me out. I am really confused.
I mean a first time buyer is a person who hasn't owned a home previously. But I read somewhere that as per lending rules, first time buyer is someone who hasn't owned for the past 3 years before buying the house. Which do you think is correct? Is it that a person like Max who has owned a home a few years back can still qualify for a first time buyers loan program?
Thanks for any info
Please help me out. I am really confused.
I mean a first time buyer is a person who hasn't owned a home previously. But I read somewhere that as per lending rules, first time buyer is someone who hasn't owned for the past 3 years before buying the house. Which do you think is correct? Is it that a person like Max who has owned a home a few years back can still qualify for a first time buyers loan program?
Thanks for any info
The designation of "first time homebuyer" is one of those terms that doesn't follow common sense. All I can tell you is that the lending business has very broad ways of defining this term.
Obviously, if you have never purchase a home before you are a first-time homebuyer.
If you take a break from doing something long enough, you may need to take lessons again if you decide to restart. The last time I went snow skiing it had been 8 years since my previous ski trip. While I wasn't a "first-time" skier, I took a beginner class to reorient myself to skiing, technique, etc.
The same principle holds true with "first-time homebuyers" in that if you haven't owned a property in the past 3 years, many (not all) lenders and many (not all) loan programs would allow you to apply as a "first-time homebuyer".
First-time homebuyer loan programs are generally more helpful to homebuyers with qualifying challenges. That challenge may be related to their financial situation like income or assets or it can be a result of credit issues in the past. The point is that lenders are trying to qualify more people with more flexible programs.
At Bank of America, we have several fantastic first-time homebuyer programs that people can qualify for even if they owned a home during the past 3 years if they are going to have it sold by the time they buy their new home. I know, I know....it doesn't make sense.
"first-time homebuyer" is in some cases no more than a marketing term. In other circumstances it is an important loan eligibility requirement. Discerning which can be extremely difficult for the consumer.
good luck and I hope that helped.
Obviously, if you have never purchase a home before you are a first-time homebuyer.
If you take a break from doing something long enough, you may need to take lessons again if you decide to restart. The last time I went snow skiing it had been 8 years since my previous ski trip. While I wasn't a "first-time" skier, I took a beginner class to reorient myself to skiing, technique, etc.
The same principle holds true with "first-time homebuyers" in that if you haven't owned a property in the past 3 years, many (not all) lenders and many (not all) loan programs would allow you to apply as a "first-time homebuyer".
First-time homebuyer loan programs are generally more helpful to homebuyers with qualifying challenges. That challenge may be related to their financial situation like income or assets or it can be a result of credit issues in the past. The point is that lenders are trying to qualify more people with more flexible programs.
At Bank of America, we have several fantastic first-time homebuyer programs that people can qualify for even if they owned a home during the past 3 years if they are going to have it sold by the time they buy their new home. I know, I know....it doesn't make sense.
"first-time homebuyer" is in some cases no more than a marketing term. In other circumstances it is an important loan eligibility requirement. Discerning which can be extremely difficult for the consumer.
good luck and I hope that helped.
Now I get it Ken. Thanks for sharing the information. :)