If you are considering the purchase of a new home, you are likely looking for as many ways to save money on the endeavor as possible. One of the most popular methods of cutting the cost of a home purchase is to apply for first time home buyer benefits. However, understanding whether you qualify — especially if your spouse owns a home but you do not — can be a challenge that will have a lasting impact on your finances as you plan for your upcoming large purchase.
Typical First Time Home Buyer Benefits
Being a first time home buyer comes with a variety of benefits; your state may offer additional perks. In general, first time buyers can expect to have access to some grants that will assist with the down payment on the home, as well as a variety of fixed rate loans. Some programs will even allow you to purchase a house without a down payment; however, you should consider how this option will impact your overall financial plan over the life of the loan. First time home buyers may also qualify for federal tax credits, which can reduce the buyer’s total taxable income, resulting in fewer taxes paid. All of these benefits offer worthwhile monetary savings to first time home buyers, which makes qualifying as a first time buyer a great way to save money on your home purchase.
Qualifying As A First Time Home Buyer
Qualifying as a first time home buyer is not as simple as just never having purchased a home before. Individuals who have never made a home purchase can qualify, as can those who have rented or leased for at least three years. However, even if you as an individual do not own a home and never have, you may not qualify as a first time home buyer depending upon your spouse’s situation.
Can A Spouse Of A Homeowner Be A First Time Home Buyer?
In general, a spouse cannot be a first time home buyer if the person they are married to owns a home. Property law dictates that a spouse receives an ownership interest in the property of their partner due to marriage; this is the same principle that guides decisions such as assigning the estate to the spouse in the event of the home owner passing away, even if the other spouse was not listed on the mortgage or deed. However, it is possible to still benefit from a first time home buyer program even if your spouse has owned property before; regardless of whether you or your spouse have previously purchased a home, if three or more years have passed since you have owned a home, you may re-qualify as a first time buyer.
Similarly, you are not necessarily permanently prevented from achieving first time home buyer benefits just because your spouse has made a home purchase. If you sell the home and wait for at least three years before buying another, both you and your partner become eligible for first time home buyer advantages. Single individuals who have previously owned a home with a former spouse may also qualify as first time buyers. The purchase of a home at some point in your life—or marriage to someone who has committed to property ownership—does not permanently exclude you from achieving first time home buyer benefits later.
Other, more specific criteria also exist for niche cases. For example, if you owned a residence that was your primary residence but was not attached to a permanent foundation (such as a mobile home), you can qualify as a first time home buyer even though you own a living space. This exception works because the criteria for a “home” differs sufficiently to cause mobile homes not to count for the purpose of mortgage benefit considerations.
Navigate The Home Buying Process With Financing Experts
Whether you are considering buying a home for the very first time or you are trying to organize your finances so that you can benefit from a first time home buyer program despite previous property ownership, it is important to work with the financing experts. Fairfax Mortgage Investments can help you navigate the home buying process smoothly and without unnecessary stress while offering guidance for qualifying for as many first time home buyer benefits as possible. No financial situation is too complex; reach out to schedule a conversation with a financing expert to review your situation and goals so that you can approach home ownership confidently and with a sound plan for your finances, both now and in the future.