Maryland Smart Buy Program

Who Qualifies as a First Time Home Buyer in Maryland?

You are considered a first time home buyer in the state of Maryland if you have never owned an interest in residential real property in the state that has been your principal residence. You can be a co-signer or a co-borrower on a loan in the state of Maryland, or a primary borrower, as long as the property was never deemed your principal residence. If you qualify as a first time home buyer, you are exempt from the State of Maryland Transfer Tax automatically, which can save you in the hundreds, sometimes thousands of dollars in your closing costs.

How Do I Get First Time Home Buyer Grant?

Home Buyer grants can be an incredibly useful tool for some prospective borrowers who meet all of the other requirements to purchase a home except for having the necessary down payment. You do not need to be a first time home buyer to qualify for all grants, and in fact, some grants don’t mind if you’ve purchased multiple homes, but for the vast majority of grants, the property must be used as your primary residence. With anything in life, if someone is going to give you a grant, sometimes there additional terms and requirements that come with that grant, so researching the different grants is absolutely critical.

There are many types of grants that are specific to a certain region, so the best place to start is either with a simple Google search of “home buyer grants in my area” or to reach out to a real estate agent or loan officer, who is familiar with the area, and discuss with them what options are available. Sometimes trying to look for grant money is less advantageous than asking a family member for a Gift, so understanding the numbers and the pros and cons of any grant is critical.

How Much is a Downpayment on a House in Maryland?

The biggest misconception about home ownership, even in the year 2020, is that you need this mythical 20% down payment to qualify for a mortgage. This couldn’t be further from the truth! In fact, FHA, VA (Loans for Veterans), USDA (Loans in Rural Areas), and even Conventional mortgages all offer down payments less than 20%, sometimes with 0% down payment requirements! It is critical to find a loan originator that asks you the right questions in order to determine which loan best fits your specific needs and qualifications.

Some mortgages will require that you pay a monthly mortgage insurance fee for having less than 20% down, and some will not, so it is important to obtain estimates for the different types of loans that you qualify for so that you can compare and contrast.

How Can I Get a First Time Home Buyers Loan with Bad Credit?

FHA provides the most flexible qualification terms to purchase a home in Maryland or any other state. FHA guidelines allow for anyone to purchase a home with a credit score as low as 500, however if your credit score is below 580, then you are required to put down a minimum of 10% as your down payment, versus if your credit score is 580 or above, the minimum required down payment is only 3.5% of the purchase price. The lower your credit score however, the more difficult it may be to qualify but FHA doesn’t judge your credit score as harshly as other types of loans.

How Much are Closing Costs in MD?

According to Zillow.com, the median home value in the state of Maryland in 2019 was $308,041, which is fantastic! With higher home values, come higher costs however, and a general rule of thumb when you are purchasing a home is to assume that your closing costs will run you about 2% to 3% of your purchase price and if you are setting up an escrow account to pay for your property taxes and homeowners insurance, a requirement for all FHA loans, that will run you another 2% to 3% of your purchase price. On most properties that you purchase in Maryland, the closing costs run between 4% to 5% of the purchase price.

How Much Income Do I Need to Qualify for a Mortgage?

The answer to this question depends upon how much money you have for a down payment, what your desired monthly payment is, and then where that leaves you as far as the purchase price of your new home. Generally speaking, for every $500 a month in a mortgage payment, you need at least $1,100 per month in gross income. Keep in mind this does not factor in any other monthly debts that you pay which are included in your debt-to-income ratio, so if you have a car payment of $300, plus a $500 a month mortgage payment, you would need at least $1,800 a month in income to qualify.

How Much House Can I Afford on $60,000 a Year?

$60,000 a year is a solid salary to have and when it comes to buying a home, depending on any other debt that you have, it is a very good place to be in to purchase a home. Let’s assume that you have no debt and you are wanting to purchase a home on a $60,000 salary. All FHA lenders will use your gross income (this is before your taxes are taken out) to qualify you for the loan, so they will use a figure of $5,000 per month. To keep your debt-to-income ratio at 45% or less, you would need a mortgage payment of no more than $2,250.

There are many factors that determine your payment, before argument’s sake, you would qualify for a home in the range of $250,000 to $275,000 with a $60,000 salary and no other monthly debt obligations.

What is the Mortgage Payment on a $150 000 House?

Assuming that you put down the minimum required down payment for an FHA mortgage of 3.5%, your Principal & Interest payment on a $150,000 home would be $692.51 with a 3.75% 30 Year Fixed Rate. Adding in property taxes, homeowners insurance and monthly mortgage insurance, your total payment would be around the $1,100 per month mark.

What Credit Score is Needed to Buy a House in Maryland?

The state of Maryland is incredibly invested in the American dream of homeownership and there are very few additional barriers, if any, that Maryland asserts upon anyone that wants to buy a home. Maryland follows the guidelines set forth by FHA and HUD when it comes to credit scores in that if you have a credit score of 580 or higher, you can purchase a home with just a 3.5% down payment, while if you have a credit score of 579 or lower, you are required to bring a minimum of 10% down payment.

Maryland also allows for the seller of any property to offer the potential buyer up to 6% towards the payment of their closing costs and prepaids (i.e.: your new tax and insurance escrow account). In most cases, if the seller offers a buyer in Maryland 6% towards their closing costs and prepaids, that will cover 100% of the costs and the buyer ends up only needing to have 3.5% down payment to successfully buy the home.

What is the HOPE Program?

The HOPE program, which stands for: HOMEOWNERSHIP AND OPPORTUNITY FOR PEOPLE EVERYWHERE, helps low-income people buy public housing units by providing funds that nonprofit organizations, resident groups, and other eligible grantees can use to develop and implement homeownership programs. Grantees of these funds include public housing authorities, resident management corporations, resident councils, nonprofit organizations, housing cooperatives, and public entities. The ultimate goal is to for these grantees to provide low-income families the ability to become homeowners. The last HOPE grantee was awarded in 1994 and applications are no longer being accepted at this time.

How Can I Fix My Credit Quickly to Buy a House?

The first step to take if you are considering a home purchase is to contact an FHA approved lender and ask them to run your credit. The LAST thing you want to do is go to a consumer credit report agency and obtain your consumer credit report because not only is the consumer credit report irrelevant when buying a home, often times the credit scores are different than when a mortgage lender pulls the report. There are completely different algorithms used when a lender pulls a credit report because of the increase in risk that lenders take with what is typically one of the largest purchases and assets that you will have.

Once the FHA approved lender has run your report, if your credit needs to be improved quickly, there is a credit re-score process that is widely utilized by the best FHA lenders that can increase your score in a matter of days to help you improve not just your interest rate and loan terms but also the monthly cost that you’ll be paying as well.

What is the Lowest Credit Score to Buy a House?

FHA provides the most flexible qualification terms to purchase a home in Maryland or any other state. FHA guidelines allow for anyone to purchase a home with a credit score as low as 500, however if your credit score is below 580, then you are required to put down a minimum of 10% as your down payment, versus if your credit score is 580 or above, the minimum required down payment is only 3.5% of the purchase price. The lower your credit score however, the more difficult it may be to qualify but FHA doesn’t judge your credit score as harshly as other types of loans.

Can I Get a Mortgage Without a Job?

While there are more and more mortgages being offered that don’t require pay stubs or income or employment verification, these types of mortgages require much larger down payments and have less than favorable terms. To qualify for an FHA, VA, USDA or Conventional mortgage, having a source of income is a vital part of the approval process. This applies to a Maryland renovation loan as well.

That doesn’t mean you necessarily must have a job because retirement income, pensions, annuity distributions and a host of other income sources can and will be used to help qualify you for these types of mortgages. Having a job is not a requirement but having an income source is.

What is the 36% Rule?

The 28/36 rule states that a household should spend a maximum of 28% of its gross monthly income on total housing expenses; it should spend no more than 36% on total debt service, including housing and other debt such as car loans, installment loans, school loans and revolving credit card loans. This is commonly referred to as your “debt-to-income” ratio.

While this is a general rule, FHA mortgages are far more flexible in their allowable ratios which is why FHA loans are often the good to mortgage for people who are just starting out in life or who have a spouse whose income cannot be used to qualify or a host of different reasons.

First Time Home Buyer Programs in MD with No Money Down

Maryland offers several different grant programs which require little to no down payment and it’s critical to determine which, if any, are right for you. As with anything in life, if you don’t put down any money, there is always a side effect that you will have to deal with. For example, some grants come with a monthly payment each month, while some have no payment but must be paid off in full if you refinance or sell the home, so it’s important to educate yourself on the details.

There are always quite a few programs available for those who are interested in moving into areas that the city, county and state are trying to lure people to buy in, and the best way to find out about these programs is either to use a general Google search or to talk to you a trusted lender.

Maryland First Time Home Buyer Tax Credit

The state of Maryland is VERY generous to it’s first time home buyers. You are considered a first time home buyer in the state of Maryland if you have never owned an interest in residential real property in the state that has been your principal residence. You can be a co-signer or a co-borrower on a loan in the state of Maryland, or a primary borrower, as long as the property was never deemed your principal residence. If you qualify as a first time home buyer, you are exempt from the State of Maryland Transfer Tax automatically, which can save you in the hundreds, sometimes thousands of dollars in your closing costs.

Maryland First Time Home Buyer Closing Costs

According to Zillow.com, the median home value in the state of Maryland in 2019 was $308,041, which is fantastic! With higher home values, come higher costs however, and a general rule of thumb when you are purchasing a home is to assume that your closing costs will run you about 2% to 3% of your purchase price and if you are setting up an escrow account to pay for your property taxes and homeowners insurance, a requirement for all FHA loans, that will run you another 2% to 3% of your purchase price. On most properties that you purchase in Maryland, the closing costs run between 4% to 5% of the purchase price.

Maryland First Time Home Buyer Programs 2018

Maryland offers several different grant programs which require little to no down payment and it’s critical to determine which, if any, are right for you. As with anything in life, if you don’t put down any money, there is always a side effect that you will have to deal with. For example, some grants come with a monthly payment each month, while some have no payment but must be paid off in full if you refinance or sell the home, so it’s important to educate yourself on the details.

There are always quite a few programs available for those who are interested in moving into areas that the city, county and state are trying to lure people to buy in, and the best way to find out about these programs is either to use a general Google search or to talk to you a trusted lender.

Maryland Smartbuy

Maryland SmartBuy helps homebuyers with qualifying student debt purchase a home. The program works by paying off student debt during the purchase of the home through special Maryland Mortgage Program (MMP) financing. Maryland SmartBuy involves the purchase of move-in-ready homes currently owned by, and available from, the state of Maryland.

Maryland SmartBuy 2.0 gives homebuyers an opportunity to purchase any home in Maryland that meets Maryland Mortgage Program guidelines while paying off student debt. This limited time program provides all of the student debt relief offered by the original Maryland SmartBuy while making more homes eligible for purchase.

To qualify for either Maryland SmartBuy program, homebuyers must have an existing student debt with a minimum balance of $1,000. Maryland SmartBuy financing provides up to 15% of the home purchase price for the borrower to pay off their outstanding student debt. Maryland SmartBuy 2.0 offers the same student debt relief of 15% of the home purchase price with a maximum payoff of $40,000.

Maryland First Time Home Buyer Grants 2019

Maryland offers several different grant programs which require little to no down payment and it’s critical to determine which, if any, are right for you. As with anything in life, if you don’t put down any money, there is always a side effect that you will have to deal with. For example, some grants come with a monthly payment each month, while some have no payment but must be paid off in full if you refinance or sell the home, so it’s important to educate yourself on the details.

There are always quite a few programs available for those who are interested in moving into areas that the city, county and state are trying to lure people to buy in, and the best way to find out about these programs is either to use a general Google search or to talk to you a trusted lender