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5 Tips for Home Loan Financing


If you are thinking of financing a new home, 2012 may be the year to pull the trigger. There are many home loan factors to consider when financing a house. Nationwide understands the obstacles that come with financing for first time home buyers and we offer the best home loans available in the marketplace today.  Here are five tips to maximize your home loan financing experience in the New Year.

1. Low Mortgage Rates Ensure Affordability

It’s no secret that home loan rates have been hovering at the lowest levels of all time.  Most economists have forecasted the trend for low interest rates to continue in 2012 mostly because the Federal Reserve has made a strong commitment to back mortgages aggressively until the housing market rebounds. Many loan companies believe that interest rates will remain at record lows to make home buying more attractive. The other driving factor for low mortgage rates has been a sluggish economy. Typically the interest rates stay low when the U.S.economy struggles.

2. Home Prices Have Fallen

In many areas across the country, house values have reverted back to 2002 and 2003 levels. This presents a significant opportunity for first time home buyers to get into a real estate investment at a bargain price. Most realtors have predicted that 2012 will continue to see some great home buying opportunities because foreclosures, short sales and timid buyers have driven the home prices to an extremely attractive levelin most regions of the United States.

Fox News recommended buying a home because of the opportunities that our economic uncertainty have dictated. The reality is that many potential home buyers have been waiting in the wings for the dust to settle with the housing crisis. According to the Mortgage Bankers Association, purchase loan applications declined to the lowest point in 15 years back in August. The lack of home loan applications signals the uncertainty of the housing market but that doesn’t mean that it’s not a great time to purchase a home. If you have the ability to make the proposed mortgage payment without it breaking the bank then it makes sense.  According to B of A loan analysts, Jeff Moran, “Many first time home buyers actually reduce their housing expenses because house prices and interest rates are so low.”

3. Tax Deductibility from Mortgage Interest

One of the driving factors for many Americans to become homeowners has been to reap the benefits of deducting the interest on your home loan payment each month. Most homeowners save thousaands of dollars a year by deducting the mortgage interest for their primary residence.

4. Buying a Home with a Small Down-Payment

Many first time home buyers are attracted to FHA home loans because they only require a 3.5% down-payment.  This allows new home buyers to save their money for important things like moving, buying furniture and saving for a “rainy day.”

5. Flexible Home Loan Guidelines for New Home Buyers

John Giangardella, loan officer at VIP Mortgage in Southern California, said, “FHA is a great asset for the path to home ownership in America.” According to a recent Freddie Mac survey, “FHA interest rates have fallen below 4% on fixed terms for 30-years. There are mortgage insurance premiums that are charged to the borrower but it usually pencils out to make sense.  Giangardella continued, “Low FHA rates and flexible guidelines also help new home buyers get there foot in door.” FHA allows low credit scores and that makes them one of the last bad credit mortgage options this year.”

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