This article is sponsored by Bank of America as part of our series Property and Power: The Millennial Woman’s Guide To Homeownership — What Every Woman Needs On Her Agenda To Make Smart Decisions. Catch up on the full series here.
Achieving the American Dream is a goal that many hope to attain during their lifetime. For most people, that includes the opportunity to purchase a home to call their own. However, the idea of purchasing a home can seem daunting, but with the right tools and education, even this significant feat is attainable.
“First-time homebuyers may be holding off for the ‘right time,’ but there is no such thing because home buying is such a personal decision,” explained AJ Barkley, Neighborhood and Community Lending Executive at Bank of America. “While there is no secret formula to assessing emotional and financial readiness, answering a few questions can help you determine how close you are to becoming a homeowner and equip you with the resources you need to move forward with your home buying goals.”
According to Bank of America’s Homebuyer Insights Report, many prospective buyers are eager to swap unpredictable monthly rent fees with steady monthly mortgage payments. In fact, for prospective buyers, nine in ten (89%) are motivated to buy a home, with 49% looking at real estate listings, and 29% touring homes virtually. While many dream about purchasing that first home, the reality is many are still unsure about the home purchase process.
We spoke with some first-time homebuyers to hear about barriers they faced throughout the process – such as the uncertainty of knowing whether they would qualify for a loan, the fear of being outbid by other buyers, and the fear of not being able to afford a house in the area of their choosing.
“One of my biggest fears was being outbid,” first-time homebuyer Kurt Samuels admitted. “It’s a seller’s market right now which means people are offering over the asking price, and I wasn’t trying to go broke competing.”
“The fear of not being able to afford it was my main concern. I had to take a good honest look at my money, especially as a freelancer. It was already stressful getting pay stubs and tax returns together,” shared first-time home buyer Janay Coplon. “They needed to know a lot of information that even I didn’t know, and it was stressful to compile it all together.”
It can be difficult to understand whether or not to consider yourself a first-time buyer. Generally, what qualifies someone as a first-time homebuyer is the fact that they haven’t owned property in the past three years.
Prospective homeowners may have cosigned a loan for a friend or relative in the past, which can cause confusion about whether or not they qualify as a first-time buyer. According to Barkley at Bank of America, that doesn’t necessarily prevent you from being considered a first-time homebuyer.
“If you co-sign on a mortgage, generally, you would not be considered a first-time homebuyer. However, if the mortgage was paid off more than three years ago, then you may qualify as a first-time homebuyer,” Barkley shared. She explained that the same rule of thumb applies if your name is listed on a deed.
“The criteria for ‘first-time home buyer’ may be confusing, so meeting with a lending specialist is the best first step to confirm your status and see if you qualify for any first-time buyer assistance programs,” said Barkley. “In fact, you’ll likely find many down payment assistance programs do not require you to be a first-time homebuyer or, depending on the program, there may be benefits that you are eligible for.”
One of these programs is Bank of America’s Community Homeownership Commitment®– a $15 billion initiative that aims to help more than 60,000 individuals and families purchase homes through 2025. With one of the most generous grants in the industry, a potential buyer can receive up to $17,500 in funds that do not have to be repaid. In addition to the grants, the program provides access to affordable mortgages, educational resources, and expertise including:
- First-Time Homebuyer Online Edu-Series videos in English and Spanish that demystifies the home buying roadmap.
- Bank of America Real Estate Center® provides a simple way to research neighborhoods and identifies down payment and closing cost grant-eligible properties.
- Bank of America Digital Mortgage Experience® puts the buyer in control, allowing them to start a mortgage via online or our mobile app.
- Better Money Habits offers financial education that break down topics in ways that are approachable and easy to understand.
Resources like Community Homeownership Commitment® can help historically low- and moderate-income communities experience the potential wealth-building power of homeownership. In addition to this program, “Bank of America recently announced its $1.25 billion commitment to advance racial equality and economic opportunity over five years,” Barkley shares. “This effort is intended to address disparity and achieve racial equality and opportunity through direct actions and investments – including affordable housing.”
“Homeownership is an important financial investment, provides a place to build memories, and is the foundation for creating a family legacy,” Barkley said.
“Homeownership also gives you a stake in the community. It has long encouraged residents to connect with neighbors, build a community and put down long-term roots.”
Find out more about Bank of America’s Community Homeownership Commitment®, and other resources for prospective homebuyers here.
[EDITOR’S NOTE: THIS ARTICLE IS SPONSORED BY BANK OF AMERICA. THE WORDS AND OPINIONS EXPRESSED ARE THOSE OF THE AUTHOR AND THE SOURCES NAMED.]
QUALIFIED BORROWERS MUST MEET ELIGIBILITY REQUIREMENTS INCLUDING, BUT NOT LIMITED TO, BEING OWNER-OCCUPANTS, MEETING CERTAIN QUALIFYING INCOME LIMITATIONS AND PURCHASING A HOME WITHIN A CERTAIN GEOGRAPHICAL AREA. MINIMUM COMBINED LOAN-TO-VALUE MUST BE GREATER THAN OR EQUAL TO 80%. THE AMERICA’S HOME GRANT PROGRAM IS A LENDER CREDIT. PROGRAM FUNDS CAN ONLY BE USED FOR NONRECURRING CLOSING COSTS INCLUDING TITLE INSURANCE, RECORDING FEES, AND IN CERTAIN SITUATIONS, DISCOUNT POINTS MAY BE USED TO LOWER THE INTEREST RATE. THE GRANT CANNOT BE APPLIED TOWARD A DOWN PAYMENT, PREPAID ITEMS OR RECURRING COSTS, SUCH AS PROPERTY TAXES AND INSURANCE. BORROWERS CANNOT RECEIVE PROGRAM FUNDS AS CASHBACK. MAXIMUM INCOME AND LOAN AMOUNT LIMITS APPLY. THE HOME LOAN MUST FUND WITH BANK OF AMERICA. BANK OF AMERICA MAY CHANGE OR DISCONTINUE THE AMERICA’S HOME GRANT PROGRAM OR ANY PORTION OF IT WITHOUT NOTICE. NOT AVAILABLE WITH ALL LOAN PRODUCTS, PLEASE ASK FOR DETAILS.
QUALIFIED BORROWERS MUST MEET ELIGIBILITY REQUIREMENTS SUCH AS BEING OWNER-OCCUPANTS AND PURCHASING A HOME WITHIN A CERTAIN GEOGRAPHICAL AREA. MAXIMUM INCOME AND LOAN AMOUNT LIMITS APPLY. MINIMUM COMBINED LOAN-TO-VALUE MUST BE GREATER THAN OR EQUAL TO 80%. PROGRAM FUNDS CAN BE APPLIED TOWARD DOWN PAYMENT ONLY. BORROWERS CANNOT RECEIVE PROGRAM FUNDS AS CASHBACK IN EXCESS OF EARNEST MONEY DEPOSITS. THE DOWN PAYMENT GRANT PROGRAM MAY BE CONSIDERED TAXABLE INCOME, A 1099-MISC WILL BE ISSUED, CONSULT WITH YOUR TAX ADVISOR. MAY BE COMBINED WITH OTHER OFFERS. THE HOME LOAN MUST FUND WITH BANK OF AMERICA. DOWN PAYMENT GRANT MAY ONLY BE APPLIED ONCE TO AN ELIGIBLE MORTGAGE/PROPERTY, REGARDLESS OF THE NUMBER OF APPLICANTS. BANK OF AMERICA MAY CHANGE OR DISCONTINUE THE BANK OF AMERICA DOWN PAYMENT GRANT PROGRAM OR ANY PORTION OF IT WITHOUT NOTICE. NOT AVAILABLE WITH ALL LOAN PRODUCTS, PLEASE ASK FOR DETAILS.