Financing Options for First Time Home Buyers
Don't Believe Everything You Hear
Due to media misinformation as well as other economic factors such as rising gas prices and the threat of a recession, increasing numbers of Americans are reluctant to buy houses. Even those people who recognize this is a buyer's market and would like to buy a home are shying away from banks and mortgage brokers because they're afraid that they won't get approved for a loan because they don't have enough down payment or they are afraid of the loan conditions. The media has frozen the public with fear not facts. However, you shouldn't believe everything you hear. There are many good loan programs for both the first time buyer and the seasoned veteran.
Let's Look at the Facts
Fact #1: If you look at the historical data from the Federal Reserve regarding contract interest rates on commitments for fixed-rate first mortgages, you'll see that the current rate is down at 5.97 as of March 2008. Now compare this interest rate to the last two previous years and you will see that those interest rates were a lot higher! This is one reason 2008 seems to be a great year for home buyers.
Fact #2: Still worried about down payment requirements to buy a home? If you listen to the media, only buyers with 20% down payment, cash in hand, are able to get a loan without high interest rates. We do not penalize buyers who do not have 20% down payment. There are programs designed to offer the buyer different down payment choices. To cite one example, FHA offers a 97% loan, requiring only 3% down payment from the buyer. Sabrina Schell is a loan officer at Southeastern Mortgage Corporation, and her focus of business is in the Triangle area. She has been working to educate North Carolina home buyers about another good program called the USDA Rural Development Program, making available a 100% loan option. Here is what she wants buyers to know about this program:
Rural development is a fantastic 100% financing program in a time where most 100% financing programs have been eliminated. The program is driven by population per capita meaning most of the surrounding counties of Wake are eligible (all of Johnston, all of Granville, all of Franklin, etc..) as well as small portions of Wake County are eligible. While this program does have income limits, they escalated with the number of persons in a household. This is an amazing fixed rate program at market interest rates, with no mortgage insurance. Well worth a buyer investigating whether this is a loan program that would work for them.
To get in touch with Sabrina Schell and learn more about this program, go to www.TriangleHomeFinance.com
Fact #3: Still worried about the loan program you will end up with? The media tells us that lenders will give loans to everyone. Yes, there are loan programs available to allow most people to become homeowners. Credit scores drive most, if not all, lending programs available to buyers. This is the single most important factor that will decide what loan programs are available to you. The loan program derived from your credit scores provides you with the term (length of the loan period), the rate (interest rate used to calculate the monthly repayment of the loan), and the closing costs (upfront fees associated with getting the loan) and the down payment requirements. It is not the lender's responsibility to tell someone they cannot be a homeowner, but at what "cost" the buyer can become a homeowner. The question every buyer has to ask themselves and answer honestly: "Is the cost (the monthly re-payment of the loan, the closing costs and the down payment) to purchase a home an acceptable cost?" To be prepared to answer lender's qualifying questions, contact Buyers Advantage Group before you call a lender.
Steps to a Better Home Buying Experience
When you are purchasing your first home or even thinking about it, it can be both exciting and scary. However, you should not let misinformation scare you away from realizing your dreams. The first step to getting good information is to invest the time and energy to understand that buyers have choices as to the type of real estate representation available. The agents at Buyers Advantage Group can help you in your quest to find the perfect home. The more knowledgeable you are about the housing market and everything that goes along with it, the more confident and better decisions you'll be able to make. Our agents act as your consultant and educator to protect your interests as a buyer. As exclusive buyer agents, we are helping buyers through every step of the buying process. Start your research now by visiting Buyers Advantage Group to understand your best choice to help you with your home purchase.
