Which First Time Home Buyer Programs Are Right for You?
Jeff Ragan asked:
So, you want to buy a home. I congratulate you. Now, you need to know what first time home buyer programs are right for you. Where do we begin?
Let’s get down to the basics. First you want to have your credit file in order. By this I mean, no collections or late payments in the last 2 years.
Assuming this is the case, you can begin shopping around for some first time home buyer programs. There are plenty out there. But, for the sake of time and space in this article, I’m going to share with you two options. FHA and VA.
Once you get a feel for these two programs, you will have the knowledge to talk the talk and walk the walk. There are others programs however.
FHA FIRST TIME HOME BUYER PROGRAMS
Now, hands down the FHA is one of the best first time home buyer programs. Why? It has relaxed credit standards over the conventional loan and also has a low down payment feature.
First let’s talk about the credit requirements. In the past FHA would let you buy a home without any credit score at all. Now they seem to be requesting a score around 620. This is still lower than a conventional loan which requires 700 and above.
A credit file is not all that hard to build if you do not have one. Talk with a large national lender about this. Look for a loan officer that has years of experience with FHA home loans. He/she can give you some ideas.
When it comes to a down payment, FHA since 1934 has offered this 3% low down payment option. This makes it possible for you, the first time home buyer to get into a home with very little money.
In fact, the down payment can even be a gift from a relative or charity. I’ve written other articles about down payment assistance, which are awesome when you see how they work. You can in effect buy a house with no money down.
FHA loans do have MIP or a mortgage insurance premium of 1.75% of the loan amount. You have to pay this up front at the loan closing. This amount is added onto your original mortgage amount. So it increases your payment by about .55% of the loan amount until you pay off the mortgage.
If you ever go to sell a house that has FHA mortgage insurance on it, or pay off the loan early you may be entitled to a refund of this insurance premium. Check with your lender about this.
VA FIRST TIME HOME BUYER PROGRAMS
Now the VA loan program is even better. However, you must be a veteran to take advantage of these first time home buyer programs.
When it comes to credit, the VA loan works much the same way as the FHA home loan. So I’m not going to spend much time on this. VA loans may allow a little bit lower credit score.
With the VA home loan, the down payment and MIP is a horse of a different color.
VA loans require NO DOWN PAYMENT. Yes they are 100% financing. Again this is a benefit for veterans only.
The mortgage insurance premium is another reason the VA loan is for first time home buyers. They do not have any MIP to be paid. HUD guarantees the loan 100%. However, there is a VA Funding fee which could range from 0-3% of the loan amount. If the veteran is injured in combat and can have this documented by the VA, then it is 0% funding fee.
So unlike the FHA loan which your loan amount and payment increases slightly, with a VA loan the payment amount does not increase, but the loan amount may increase because of the funding fee.
This is the best loan option if you ask me.
Let me tell you a brief story about a VA loan I did several years ago. There was this really nice couple with one child that wanted to buy a home.
They came to me for a mortgage. After talking with them I learned he was a veteran. When I discussed the benefits of a VA loan they got excited.
He was an injured Vet and had the paperwork to prove it. He had been permanently injured in the face because of shrapnel.
So a long story made short, they bought a house for $97,000 with no money down and no VA funding fee. If I recall the maximum out of pocket he put into the deal was less than $600.
Now they are buying a home for less than what they were paying in rent. Again, what VA offers is one of the greatest of all first time home buyer programs.
Explore all your options when looking for a mortgage. Ask questions of your loan officer. Be sure to get your education first, then go looking.
Gina
So, you want to buy a home. I congratulate you. Now, you need to know what first time home buyer programs are right for you. Where do we begin?
Let’s get down to the basics. First you want to have your credit file in order. By this I mean, no collections or late payments in the last 2 years.
Assuming this is the case, you can begin shopping around for some first time home buyer programs. There are plenty out there. But, for the sake of time and space in this article, I’m going to share with you two options. FHA and VA.
Once you get a feel for these two programs, you will have the knowledge to talk the talk and walk the walk. There are others programs however.
FHA FIRST TIME HOME BUYER PROGRAMS
Now, hands down the FHA is one of the best first time home buyer programs. Why? It has relaxed credit standards over the conventional loan and also has a low down payment feature.
First let’s talk about the credit requirements. In the past FHA would let you buy a home without any credit score at all. Now they seem to be requesting a score around 620. This is still lower than a conventional loan which requires 700 and above.
A credit file is not all that hard to build if you do not have one. Talk with a large national lender about this. Look for a loan officer that has years of experience with FHA home loans. He/she can give you some ideas.
When it comes to a down payment, FHA since 1934 has offered this 3% low down payment option. This makes it possible for you, the first time home buyer to get into a home with very little money.
In fact, the down payment can even be a gift from a relative or charity. I’ve written other articles about down payment assistance, which are awesome when you see how they work. You can in effect buy a house with no money down.
FHA loans do have MIP or a mortgage insurance premium of 1.75% of the loan amount. You have to pay this up front at the loan closing. This amount is added onto your original mortgage amount. So it increases your payment by about .55% of the loan amount until you pay off the mortgage.
If you ever go to sell a house that has FHA mortgage insurance on it, or pay off the loan early you may be entitled to a refund of this insurance premium. Check with your lender about this.
VA FIRST TIME HOME BUYER PROGRAMS
Now the VA loan program is even better. However, you must be a veteran to take advantage of these first time home buyer programs.
When it comes to credit, the VA loan works much the same way as the FHA home loan. So I’m not going to spend much time on this. VA loans may allow a little bit lower credit score.
With the VA home loan, the down payment and MIP is a horse of a different color.
VA loans require NO DOWN PAYMENT. Yes they are 100% financing. Again this is a benefit for veterans only.
The mortgage insurance premium is another reason the VA loan is for first time home buyers. They do not have any MIP to be paid. HUD guarantees the loan 100%. However, there is a VA Funding fee which could range from 0-3% of the loan amount. If the veteran is injured in combat and can have this documented by the VA, then it is 0% funding fee.
So unlike the FHA loan which your loan amount and payment increases slightly, with a VA loan the payment amount does not increase, but the loan amount may increase because of the funding fee.
This is the best loan option if you ask me.
Let me tell you a brief story about a VA loan I did several years ago. There was this really nice couple with one child that wanted to buy a home.
They came to me for a mortgage. After talking with them I learned he was a veteran. When I discussed the benefits of a VA loan they got excited.
He was an injured Vet and had the paperwork to prove it. He had been permanently injured in the face because of shrapnel.
So a long story made short, they bought a house for $97,000 with no money down and no VA funding fee. If I recall the maximum out of pocket he put into the deal was less than $600.
Now they are buying a home for less than what they were paying in rent. Again, what VA offers is one of the greatest of all first time home buyer programs.
Explore all your options when looking for a mortgage. Ask questions of your loan officer. Be sure to get your education first, then go looking.
Gina
Can the first time home buyer credit be used for a down payment?
Big Iron asked:
Keep hearing that the first time home buyer credit can now be used for a down payment. Trying to find out if that is true or what the qualifications/requirements are for that.
Julie
Keep hearing that the first time home buyer credit can now be used for a down payment. Trying to find out if that is true or what the qualifications/requirements are for that.
Julie
What questions should a first-time home buyer ask the realtor?
martinlh asked:
I’m looking to buy a home for the first time. Could use some advice on what to look at and ask about.
Marvin
I’m looking to buy a home for the first time. Could use some advice on what to look at and ask about.
Marvin
First Time Home Buyer Loans: the Practical Guidelines
Meghna Arora asked:
Is this your first experience of buying a house with the help of a loan? And you are unable to judge a reliable loan that gives flexible advantages along with low and cheap interest rates. Ruminating such thoughts while looking for a loan is a normal affair, and thus to support your search and to guide you in a proper way, First Time Home Buyer Loans are introduced. First time home buyer loans are capable of arranging money for the applicants and provide the necessary monetary support when required.
To make it lenient, the process of accessing the loan, first time home buyer loans are capable of arranging large amount of money. And amounts released under such scheme are possible against collateral provided to lenders that assures of the repayments. Following the secured form of loan policies it unleash large amount of loan. This feature aids the borrowers to purchase the plot or flat without any financial hurdle. Amount released under such schemes are limited and also depends upon the equity of the collateral. So, if you are ready to pledge collateral with higher equity then you can withdraw loan in large sum.
First time home buyer loans follow the repayment terms that is easy and depends upon the equity of the collateral. But before taking a plunge into the world of loan or approaching lenders for first time home buyer loans, certain points should be taken into granted with which they can make the deal more suitable and affordable. Applicants should take the follow up of the value of the property which they intend to purchase and evaluate the money required. Such calculation of the financial breach is necessary for a rational deal. Succeeding this, applicants should look for a rate which they can afford or according to their budget, as it is directly proportional to monthly installments. Beings a secured form of loan does not mean applicants have to move the house. First time home buyer loans give a warm welcome to person with poor or fragile credit profile holder.
All the advantages and approval process can be enjoyed from home or office in a click with the aid of online application loan. So, the first time home buyer loans set the guidelines for the fresher that helps them to get a reasonable deal.
Leslie
Is this your first experience of buying a house with the help of a loan? And you are unable to judge a reliable loan that gives flexible advantages along with low and cheap interest rates. Ruminating such thoughts while looking for a loan is a normal affair, and thus to support your search and to guide you in a proper way, First Time Home Buyer Loans are introduced. First time home buyer loans are capable of arranging money for the applicants and provide the necessary monetary support when required.
To make it lenient, the process of accessing the loan, first time home buyer loans are capable of arranging large amount of money. And amounts released under such scheme are possible against collateral provided to lenders that assures of the repayments. Following the secured form of loan policies it unleash large amount of loan. This feature aids the borrowers to purchase the plot or flat without any financial hurdle. Amount released under such schemes are limited and also depends upon the equity of the collateral. So, if you are ready to pledge collateral with higher equity then you can withdraw loan in large sum.
First time home buyer loans follow the repayment terms that is easy and depends upon the equity of the collateral. But before taking a plunge into the world of loan or approaching lenders for first time home buyer loans, certain points should be taken into granted with which they can make the deal more suitable and affordable. Applicants should take the follow up of the value of the property which they intend to purchase and evaluate the money required. Such calculation of the financial breach is necessary for a rational deal. Succeeding this, applicants should look for a rate which they can afford or according to their budget, as it is directly proportional to monthly installments. Beings a secured form of loan does not mean applicants have to move the house. First time home buyer loans give a warm welcome to person with poor or fragile credit profile holder.
All the advantages and approval process can be enjoyed from home or office in a click with the aid of online application loan. So, the first time home buyer loans set the guidelines for the fresher that helps them to get a reasonable deal.
Leslie
First Time Home Buyer Tax Credit Extension: More Fuel for the Charleston, SC Market
Lee Keadle asked:
We’ve had great news in the housing market this past week! The $8,000 First Time Home Buyer Tax Credit will be extended through April 30, 2010. This extension is good news especially for first time home buyers taking advantage of the credit.
But, even if you don’t qualify for it, know that you should benefit indirectly from it. It’s been a very effective incentive for getting homes sold in Charleston, and as Realtors we’ve seen the results firsthand in our area. The extension is expected to help continue the healthy growth that we’ve seen in the Charleston real estate market in the past few months.
I have included below more of the details regarding the tax credit extension. These are important to note because this go round, there are more provisions to meet compared to the original tax credit.
1) The IRS defines a first-time home buyer as someone who has not owned a principal residence for the three years prior to purchase.
2) The amount is equal to 10 percent of the home’s purchase price, up to a maximum of $8,000.
3) The purchase price of the home must be $800,000 or less.
4) The time frame includes sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, if a binding sales contract is signed by April 30, 2010, a buyer can still qualify if he/she closes by June 30, 2010. Buyers who are in the military have some special extensions for these deadlines, so be sure to tell your lender if you meet this qualification.
5) For homes purchased on or after January 1, 2009 and on or before November 6, 2009: single tax payers must meet the income limit of $75,000 (for married couples filing jointly, their income must not exceed $150,000).
6) For homes purchased after November 6, 2009 and on or before April 30, 2010: single tax payers must not exceed the income limit of $125,000 (married couples filing jointly must not exceed $225,000).
7) The main benefit of a tax credit is that it works as a dollar-for-dollar benefit. If it were a tax deduction, it would only reduce your tax liability and would only save you $1,000 to $1,500 in the long run. So, let’s say you are a first time home buyer qualifying for the entire credit. If you owe $8,000 in income taxes qualify for a tax credit of $8,000, you would owe nothing.
8) The tax credit is also refundable, which means you can receive a check for the credit if you have little or no income tax liability. So, let’s say you are eligible for a tax credit of $8,000, and you owe $3,000 in income taxes. You can still receive a check for the remaining $5,000!
Brad
We’ve had great news in the housing market this past week! The $8,000 First Time Home Buyer Tax Credit will be extended through April 30, 2010. This extension is good news especially for first time home buyers taking advantage of the credit.
But, even if you don’t qualify for it, know that you should benefit indirectly from it. It’s been a very effective incentive for getting homes sold in Charleston, and as Realtors we’ve seen the results firsthand in our area. The extension is expected to help continue the healthy growth that we’ve seen in the Charleston real estate market in the past few months.
I have included below more of the details regarding the tax credit extension. These are important to note because this go round, there are more provisions to meet compared to the original tax credit.
1) The IRS defines a first-time home buyer as someone who has not owned a principal residence for the three years prior to purchase.
2) The amount is equal to 10 percent of the home’s purchase price, up to a maximum of $8,000.
3) The purchase price of the home must be $800,000 or less.
4) The time frame includes sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, if a binding sales contract is signed by April 30, 2010, a buyer can still qualify if he/she closes by June 30, 2010. Buyers who are in the military have some special extensions for these deadlines, so be sure to tell your lender if you meet this qualification.
5) For homes purchased on or after January 1, 2009 and on or before November 6, 2009: single tax payers must meet the income limit of $75,000 (for married couples filing jointly, their income must not exceed $150,000).
6) For homes purchased after November 6, 2009 and on or before April 30, 2010: single tax payers must not exceed the income limit of $125,000 (married couples filing jointly must not exceed $225,000).
7) The main benefit of a tax credit is that it works as a dollar-for-dollar benefit. If it were a tax deduction, it would only reduce your tax liability and would only save you $1,000 to $1,500 in the long run. So, let’s say you are a first time home buyer qualifying for the entire credit. If you owe $8,000 in income taxes qualify for a tax credit of $8,000, you would owe nothing.
8) The tax credit is also refundable, which means you can receive a check for the credit if you have little or no income tax liability. So, let’s say you are eligible for a tax credit of $8,000, and you owe $3,000 in income taxes. You can still receive a check for the remaining $5,000!
Brad
If i am a first time home buyer is there any Government grants I can get in Kansas?
Sparky asked:
I am moving in October and I wanted to buy a house If i am a first time home buyer is there any Government grants I can get in Kansas? i would be living in Wyandotte county. If there is and they loans for my down payment or are they free grant money?
Tamara
I am moving in October and I wanted to buy a house If i am a first time home buyer is there any Government grants I can get in Kansas? i would be living in Wyandotte county. If there is and they loans for my down payment or are they free grant money?
Tamara
How do we file for the first-time home buyer tax credit ?
Nesto c asked:
My Girlfriend and I are planning on buying a house in May. We just heard about the first-time home buyer tax credit. We plan on getting the loan in both of our names. How do we file for the credit ? The price of the house around 110k. Would it better if one of us applied for the credit or both of us. Thanks for any help.
Tammy
My Girlfriend and I are planning on buying a house in May. We just heard about the first-time home buyer tax credit. We plan on getting the loan in both of our names. How do we file for the credit ? The price of the house around 110k. Would it better if one of us applied for the credit or both of us. Thanks for any help.
Tammy
Claiming the First Time Home Buyer Tax Credit: Don’t Miss Out On the Opportunity to Receive Up to $8,000 from the Federal Government!
Safiur Rahman asked:
If you are currently looking to buy your first home or the first one in three years, you have likely heard of the federal government’s first time home buyer credit which can award you with 10% percent (up to $8,000) of the purchase price of your home. If you meet the regulatory definition of a first time home buyer, fall within the specified income limits, and are not otherwise disqualified from receiving the credit you are likely wondering how to go about claiming it. This is what I will describe in this article.
Claiming the credit is a relatively straightforward process but it is important to follow all the steps carefully to avoid making silly mistakes and filing for it in a timely fashion. The first thing you should bear in mind is that you cannot claim the credit for an intended purchase at some future point in time. The credit can only be claimed for completed purchases and you will need to submit a copy of your HUD-1 settlement form as proof of the completed transaction.
You essentially claim the credit on your federal income tax return. You first need to complete IRS Form 5405 to determine the amount of your credit. Next, attach a copy of your HUD-1 settlement form to Form 5405. Then, enter your eligible credit amount on line 67 of the 1040 income tax form for 2009 returns or line 69 for 2008 returns. Lastly, package all your documents, mail it in, and you are done! No other special forms or pre-approval is necessary. If you qualify for a refund, the only thing left to do is to sit back and wait for your check to arrive.
Luis
If you are currently looking to buy your first home or the first one in three years, you have likely heard of the federal government’s first time home buyer credit which can award you with 10% percent (up to $8,000) of the purchase price of your home. If you meet the regulatory definition of a first time home buyer, fall within the specified income limits, and are not otherwise disqualified from receiving the credit you are likely wondering how to go about claiming it. This is what I will describe in this article.
Claiming the credit is a relatively straightforward process but it is important to follow all the steps carefully to avoid making silly mistakes and filing for it in a timely fashion. The first thing you should bear in mind is that you cannot claim the credit for an intended purchase at some future point in time. The credit can only be claimed for completed purchases and you will need to submit a copy of your HUD-1 settlement form as proof of the completed transaction.
You essentially claim the credit on your federal income tax return. You first need to complete IRS Form 5405 to determine the amount of your credit. Next, attach a copy of your HUD-1 settlement form to Form 5405. Then, enter your eligible credit amount on line 67 of the 1040 income tax form for 2009 returns or line 69 for 2008 returns. Lastly, package all your documents, mail it in, and you are done! No other special forms or pre-approval is necessary. If you qualify for a refund, the only thing left to do is to sit back and wait for your check to arrive.
Luis
Easy Approval for First Time Home Buyers
Melissa Kellett asked:
As a first time home buyer you may think that you don’t have enough credit history to get approved for a loan. However, mainly due to government regulations, private lenders can obtain tax benefits when they lend to first time home buyers. There are also government grants and loans for first time home buyers that will provide you with the finance you need.
Approval for first time home buyers has become increasingly simple but there are still obstacles to be overcome when you want to get a home loan for purchasing your new home. In order to understand what you need for getting approved you need to know how credit risk affects approval and how you can avoid this problem.
First Time Home Buyers Difficulties
First time home buyers seldom have a credit history long enough to create a pattern a lender could use to analyze their credit behavior. Having no credit can sometimes be worst than having bad credit. However, as regards to home loans this is not the problem as we will analyze when examining secured loans.
The real problem with first time home buyers is the lack of experience. Purchasing a home is not a simple process and unless you know which steps to take, it may take a lot more time than you expected. Proper preparation can solve this problem, so you need to gather all the information you can and learn about the legal an economic components of a home purchase.
Secured Loans: No Credit Is Overlooked
Secured loans are guaranteed with an asset which means that the risk involved for the lender is considerably reduced. The lender can always recover the money lent by taking legal action of repossession against the property to claim the amount owed. Thus, as opposed to unsecured loans, credit score and history is not so important.
Secured loans overlook the lack of credit of applicants as long as they can show proof of having enough income to cover for the monthly payments and closing costs of the loan. Nevertheless, since no credit implies a higher risk, those who lack a credit history will have to pay more interests than those who can show a good to perfect credit.
Co-Signer Further Reduces Risk
By providing a co-signer, the already lower risk implied in a secured loan transaction is reduced even more. A co-signer is at the same time responsible for the loan payments. When applying for a home loan with the aid of a co-signer, the interest rate charged for the loan is also reduced and the loan term extended to suit the applicants’ needs.
A co-signer makes a home loan approval even easier. The income requirement is easily achieved by an applicant if the co-signer income is also computed to see if the incomes reach the minimum required by law. Also, the credit requirements are more flexible as there are two people obliged by the loan. If either of them qualifies, both do.
Monica
As a first time home buyer you may think that you don’t have enough credit history to get approved for a loan. However, mainly due to government regulations, private lenders can obtain tax benefits when they lend to first time home buyers. There are also government grants and loans for first time home buyers that will provide you with the finance you need.
Approval for first time home buyers has become increasingly simple but there are still obstacles to be overcome when you want to get a home loan for purchasing your new home. In order to understand what you need for getting approved you need to know how credit risk affects approval and how you can avoid this problem.
First Time Home Buyers Difficulties
First time home buyers seldom have a credit history long enough to create a pattern a lender could use to analyze their credit behavior. Having no credit can sometimes be worst than having bad credit. However, as regards to home loans this is not the problem as we will analyze when examining secured loans.
The real problem with first time home buyers is the lack of experience. Purchasing a home is not a simple process and unless you know which steps to take, it may take a lot more time than you expected. Proper preparation can solve this problem, so you need to gather all the information you can and learn about the legal an economic components of a home purchase.
Secured Loans: No Credit Is Overlooked
Secured loans are guaranteed with an asset which means that the risk involved for the lender is considerably reduced. The lender can always recover the money lent by taking legal action of repossession against the property to claim the amount owed. Thus, as opposed to unsecured loans, credit score and history is not so important.
Secured loans overlook the lack of credit of applicants as long as they can show proof of having enough income to cover for the monthly payments and closing costs of the loan. Nevertheless, since no credit implies a higher risk, those who lack a credit history will have to pay more interests than those who can show a good to perfect credit.
Co-Signer Further Reduces Risk
By providing a co-signer, the already lower risk implied in a secured loan transaction is reduced even more. A co-signer is at the same time responsible for the loan payments. When applying for a home loan with the aid of a co-signer, the interest rate charged for the loan is also reduced and the loan term extended to suit the applicants’ needs.
A co-signer makes a home loan approval even easier. The income requirement is easily achieved by an applicant if the co-signer income is also computed to see if the incomes reach the minimum required by law. Also, the credit requirements are more flexible as there are two people obliged by the loan. If either of them qualifies, both do.
Monica
Mortgages Are Hard To Obtain For The First Time Home Buyer
Jennifer Stromsteen asked:
Talking to many people today they are looking forward to becoming a first time home owner and with the prices of homes sinking rapidly they think it is a great time to buy. Homes that would previously be far out of reach are now becoming more affordable, to the excitement of the potential first time home buyer. Unfortunately, according to several reports, mortgage insurers have been upping their standards in the United States. What this means for the first time home buyer is they have to be at the top of the bar that is raised to obtain the mortgage.
Mortgage insures are defining an ever increasing number of markets as declining. In these areas that they list as declining they are requiring a higher down payment as well as higher premiums. This means that the homes that were thought to now be affordable are still out of reach for the first time home buyer. The buyer will have to have a substantial down payment and in the declining economy saving 5 to 15 thousand dollars for a down payment is out of the question.
The market that seems so appealing to the first time home buyer and others hoping to cash in on the floor dropping out of the housing market may not be as profitable as once thought. The national home price index fell about 16% from its peak in the second quarter of 2006 and in some markets houses are selling for 50% less than a year ago. They; however, are not being sold to many first time home buyers but instead to developers hoping to turn a profit.
Additionally there is a surplus of foreclosed homes today making prices fall even farther. Between the foreclosures and other homes on the market there are plenty of affordable homes to choose from. If only the tightened mortgage standards would allow people, including the first time home buyer to clear out the inventory. There are ways of obtaining a substantial down payment and the first time home buyer with control of his credit score and shows reliability and responsibility will be able to cash in on the falling house prices and afford the unaffordable dream home. With private buyer assistance programs, gift money from family, savings over time and the sale of high dollar assets even the first time home buyer will be able to meet the heightened lending standards of the mortgage insurers.
Business is still business and companies are still in to turn a profit. Making sure you are at the top of the class will ensure you obtaining that mortgage and moving into the home you have dreamt of. Run your credit report, make sure it is in good shape, have a substantial down payment ready and start shopping for that dream home today.
Paula
Talking to many people today they are looking forward to becoming a first time home owner and with the prices of homes sinking rapidly they think it is a great time to buy. Homes that would previously be far out of reach are now becoming more affordable, to the excitement of the potential first time home buyer. Unfortunately, according to several reports, mortgage insurers have been upping their standards in the United States. What this means for the first time home buyer is they have to be at the top of the bar that is raised to obtain the mortgage.
Mortgage insures are defining an ever increasing number of markets as declining. In these areas that they list as declining they are requiring a higher down payment as well as higher premiums. This means that the homes that were thought to now be affordable are still out of reach for the first time home buyer. The buyer will have to have a substantial down payment and in the declining economy saving 5 to 15 thousand dollars for a down payment is out of the question.
The market that seems so appealing to the first time home buyer and others hoping to cash in on the floor dropping out of the housing market may not be as profitable as once thought. The national home price index fell about 16% from its peak in the second quarter of 2006 and in some markets houses are selling for 50% less than a year ago. They; however, are not being sold to many first time home buyers but instead to developers hoping to turn a profit.
Additionally there is a surplus of foreclosed homes today making prices fall even farther. Between the foreclosures and other homes on the market there are plenty of affordable homes to choose from. If only the tightened mortgage standards would allow people, including the first time home buyer to clear out the inventory. There are ways of obtaining a substantial down payment and the first time home buyer with control of his credit score and shows reliability and responsibility will be able to cash in on the falling house prices and afford the unaffordable dream home. With private buyer assistance programs, gift money from family, savings over time and the sale of high dollar assets even the first time home buyer will be able to meet the heightened lending standards of the mortgage insurers.
Business is still business and companies are still in to turn a profit. Making sure you are at the top of the class will ensure you obtaining that mortgage and moving into the home you have dreamt of. Run your credit report, make sure it is in good shape, have a substantial down payment ready and start shopping for that dream home today.
Paula