The Best Mortgages for First Time Home Buyers in DC
It isn’t easy to be a first time home buyer in DC. With the DC housing market booming, first time home buyers in DC will face significant financial challenges compared to other buyers across the country.
As reported by Zillow, the home values in DC are alarmingly high, with the median home value coming in at $544,500.
In fact, even saving up for a first home could be a challenge for Washington, DC first time home buyers. With the average rent price at $2,600, a first time home buyer in DC could still struggle with a down payment even after years of saving.
Luckily, there are plenty of first time home buyer programs in DC to make homeownership affordable and accessible for a DC first time home buyer.
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How Much House can a DC First Time Home Buyer Afford?
For first time home buyers in DC, affordability is much more complicated than simply finding out how large of a mortgage you can get approved for.
DC first time home buyers will also have to take into consideration additional affordability factors, like the closing costs of purchasing a home, monthly budget, and debt-to-income ratio.
Visit any of the DC first time home buyer calculators below to analyze factors like location, household income, down payment, and monthly debt.
Hidden Costs for DC First Time Home Buyers
Most mortgage lenders in DC will disclose additional closing costs in DC that come within the first stages of homeownership.
To ensure that the first few months of homeownership are as manageable as possible, first time home buyers in DC should be prepared for these costs before signing off on a mortgage.
While researching your options for DC first time home buyers, it’s helpful to consider the following “hidden costs” of mortgage rates:
- Mortgage application fees (typically 1-2 percent of the total purchase price)
- “Good faith deposit” (helps the seller know that you intend to buy)
- Down payment (20 percent of the total mortgage)
There are also closing costs to consider, which can include a wide range of expenses from:
- Mortgage points
- Attorney’s fees
- Inspections or surveys
- Title insurance
- Escrow deposit
- City recording fees
Although all mortgages are subject to differences, first time home buyers in DC will typically pay between 2-5 percent of the home’s total purchase price in closing costs.
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First Time Home Buyer Programs in Washington, DC
Aside from the mountains of paperwork and lists of financial jargon, many first time home buyers in DC find that saving towards a down payment is the most challenging aspect of buying a home.
Thankfully, there are plenty of first time home buyer programs in Washington, DC that are meant to ease the financial stress that naturally follows a first time home buyer in DC.
Below, you can find a list of a few first time home buyer programs in Washington, DC that a first time home buyer in DC may be able to benefit from.
- Home Purchase Assistance Program (HPAP)—Provides DC first time home buyers with interest-free loans based on income, household size, and assets
- Home Ownership CBOs—Gives low to moderate income DC first time home buyers gap financing and grants toward acquisition and closing costs
- DC Open Doors—First time home buyer programs in DC that provide down payment assistance and mortgage credit certificates for eligible DC first time home buyers
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Conclusion – Getting the Best Mortgage as a First Time Home Buyer in DC
For many DC first time home buyers, saving for a down payment and the closing costs associated with a mortgage is one of the biggest obstacles.
Home loans can become more manageable when using first time home buyer programs in DC. Depending on eligibility requirements (income, location, tax bracket, etc.) you may be able to save thousands off your down payment or closing costs.
For additional information on programs offering first time home buyer programs in DC, visit the Department of Housing and Community Development to see if you could be eligible for DC first time home buyer grants or down payment assistance.
DC first time home buyers can also utilize DCHousingSearch.org to find affordable homes for sale within the District.
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