You’ve decided to purchase a Rhode Island home – congratulations! You may be uncertain about your options, especially if you are a first-time Home Buyer. Here’s the good news: There are many advantages to buying your first home in The Ocean State, and below, we will share all about these first-time home buyer benefits. There’s never been a better time to purchase your first RI home!
What are the benefits of Buying a Home for the first time?
Buying your first home can be exhilarating – the lush landscaping, fresh paint, and new appliances will leave you overjoyed! But did you know these RI first-time Home Buyer benefits will excite you?
Here are a few advantages of buying your first home:
- You may be eligible for statewide first-time Home Buyer programs, including down payment and closing cost assistance.
- Eligible borrowers receive first-time Home Buyer tax breaks.
- Special mortgage options often help first-time buyers attain homeownership.
- Some of RI’s major cities offer programs to assist first-time buyers.
- Some borrowers receive Home Buyer education courses, setting them up for success as a homeowner.
- Homeowners build home equity, building wealth over time.
How does purchasing a home help you build equity over time?
Home equity is how much extra “value” a home holds, over and above any current liens on the property. For example, if you have a mortgage balance of $200,000 but your home is worth $400,000, your home holds $200,000 in equity.
While you may not start with equity on day one, it will build over time. Did you know most homeowners accumulated around $225,000 in wealth over the last ten years?
Renters never see any return on their investment. But homeowners do. As you make your monthly mortgage payment, your balance decreases, building home equity. With your home’s growing equity comes many perks, like building wealth and creating a resource that can be converted to cash.
What are the tax breaks and other incentives available to first-time Home Buyers?
There are several first-time Home Buyer benefits in Rhode Island. Check out the following programs to see if you may be eligible.
First-time Home Buyer loan programs
- Rhode Island Housing’s First-time Home Buyer Loan Program offers up to 100% financing.
- Nationwide first-time Home Buyer loan programs include FHA, VA, and USDA loans.
First-time Home Buyer down payment, closing cost assistance, and tax credit programs
- RIHousing’s Extra Assistance Program – down payment and closing cost assistance for eligible first-time Home Buyers
- 10KDPA – $10,000 down payment assistance loan for first-time Home Buyers
- FirstGenHomeRI – $25,000 in down payment and closing cost assistance for first-generation Home Buyers in RI
- Statewide DPA Grant – $17,500 grant for RI first-time Home Buyers
- Firsthomes Tax Credit – annual tax credit of up to $2,000 for the life of the loan
City-specific First-time Home Buyer programs
- For information about city-specific programs, check out this free resource: First-time Home Buyer Benefits in RI, MA & CT.
What are some things to consider before Buying a Home, such as location and budgeting for a down payment?
Buying a Home is a huge decision, so there are a few things to consider before diving in.
- Location, location, location. Think about your and your family’s needs. Do you need a home that provides an easy commute to work, or do you prefer a house near a specific school, park or amenities?
- Plan for extra costs like your down payment, closing costs, moving expenses, and insurance.
- When considering a specific home, think about your future. Do you want to stay in this home for decades or move in a few years?
- Check your budget to ensure your new mortgage payment won’t stretch you “too thin.”
- Create a list of needs vs. wants, and consider what amenities are most important to you and your family.
- Determine if you are eligible for any previously mentioned first-time home buyer programs.
- Hire a knowledgeable real estate team specializing in helping first-time buyers.
How do you find the right mortgage lender and get pre-approved for a loan?
Applying for a mortgage doesn’t have to be scary! You can begin by turning to your real estate agent for specialized advice – they should have a list of trusted mortgage lenders they can recommend.
Next, ensure you can provide the necessary information to get pre-approved. To prepare, know and understand your credit score and organize important documents.
When you talk to mortgage lenders, don’t be afraid to ask essential questions like the following: How long do you think the process will take? What loan options and term lengths do you offer? Will you be my primary contact throughout the process?
Relying on your real estate agent’s advice, pre-planning, and asking lenders the right questions will go a long way when seeking that all-important pre-approval letter.
What are some things to watch out for when Home Buying?
Your real estate agent will help you avoid pitfalls and can often see “red flags” before you may. Here are a few things they will help you watch out for when home shopping:
- Water damage or stains
- Moldy smells
- Foundation red flags
- Insect infestations
- Inadequate ventilation
Quick note: Home inspections are vital during Home Buying because they help identify underlying problems. These issues aren’t always dealbreakers but must be known about to be able to be addressed.
More Help for First-time Home Buyers
We hope you enjoyed learning about the first-time Home Buyer benefits in RI. We invite you to download our free First-time Home Buyer Guide, packed with helpful information! Do you know we specialize in working with first-time Home Buyers? Our skilled team can provide the resources, recommendations, and help you need to put you on the path to homeownership. We are excited to chat with you about your unique needs – please reach out to us today to discuss your options!