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Archive for First Time Home Buyer Loans

Many people have a distorted view on FHA home mortgages and first time home-buyer loan programs. One of the common misperceptions on FHA financing is that the loan programs are only for new home buyers and borrowers with low incomes. It is true that the Federal Housing Administration was formed with the intention of extending credit to all types of people fairly, but there is no minimum or maximum income requirement. However, when underwriting these government loans, the FHA mortgage lenders consider the borrower’s entire profile; rather than just a credit score or bank reserves. It’s no secret that the Department of Housing and Urban Development takes more risks on people with poor credit scores under many of the FHA loan programs.

  1. Low Down-Payment Home Loans
  2. Competitive Interest Rates for Buying a House
  3. Reduced and No Cost Mortgage Opportunities
  4. Flexible Credit Guidelines with 500 Minimum Credit Scores
  5. No Pre-Payment Penalties for Refinancing

Although FHA lenders do make exceptions on some borrowers to spend up to and even over 50% of their gross monthly income on their combined monthly debts, we prefer to keep this ratio at or below 43%. However, the automated underwriting system often approves borrowers for home loan payments that are above their comfort zone, because new homeowners often start spending more money. Buying new furniture and making home repairs can result in increased expenses.

Maybe the most notable downside to loans insured by the FHA is that they require both an upfront mortgage insurance premium and then monthly insurance payments on top of that. Unfortunately in some cases these premiums have become twice as high as the private mortgage insurance offered on conventional mortgages. The rise in FHA insurance rates can be directly attributed to the increase in loan defaults and depleted reserves under the FHA loan programs.

However with a minor down-payment of only 3.5%, lenders continue to match first time home buyers with FHA loans. According to VIP branch manager, Pat O’Connell, “You can’t forget that FHA has given millions of Americans the ability to become a homeowner with their flexible purchase mortgages.” O’Connell continued, “Many people use FHA home loans like training for new homeowners because the borrowers will often only keep the loan until they have enough equity to shed the mortgage insurance or they will refinance into a loan with lower housing expenses derived from reduced mortgage insurance premiums.”

It appears that FHA will be hiking insurance premiums once again in 2013, so it this could limit the loan origination from some FHA lenders, but as the purchase market roars back with affordable housing options, you can bet that FHA will be ready to extend first time home buyers loans to those in need.

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Buying a house and qualifying for a purchase mortgage can be a nervous time for first time home buyers, but if you prepare yourself it is possible to have a pleasant experience. Home prices have fallen considerably and home loan interest rates remain at record lows, so the timing could not be better.  The fact is that once again we can say that this year, we have seen the best fixed mortgage rates of our lifetime.

Getting a pre-approved mortgage is the important qualifying procedure in which the underwriter will review your credit history, income and monthly obligations in an effort to determine your debt to income ratio. It is important to get a home loan approval before making an offer on a house, because sellers will consider your offer to be stronger if you have already been pre-approved by a bank or lender. You should know that government loans, like the FHA mortgage requires a monthly mortgage insurance payment. When figuring out your budget you need to make sure you are considering the mortgage payment, mortgage insurance payment, property taxes.  One significant benefit is that you will be able deduct the interest on your mortgage for tax purposes. Qualifying for a first time home buyer loan can be challenging but again being prepared and working with the right lender is an important first step.

  1. Know your credit score before shop mortgage lenders online.
  2. Save money for the down-payment of the home purchase loan.
  3. Use a mortgage calculator to determine how much you can afford to spend on a new house.
  4. Compare conventional and FHA loans for first time home buyers.
  5. Consider the pros and cons of an ARM versus a fixed rate mortgage.
  6. Get a mortgage pre-qualification with a letter from a credible lender.
  7. Make sure there is no pre-payment penalty with home loan you choose.

Homeownership offers many financial benefits but in most cases there will be new costs that you must account for. Before committing to a buying a house you should get a home inspection and make sure that you are emotionally and financially prepared for being a homeowner.

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There are a few borrowers who have figured out that there are many benefits with first time homebuyer loans. When you initially become excited at the prospect of buying a home, you may have rose colored glasses on.  As soon as you take those off, however, you will come to realize that had better look into viable home finance opportunities before you get in over your head.  You need to make sure you have enough financing to fund the purchase of the home you want.  Fortunately, there are two prominent first time home buyer loans that could serve you well.  They are called an FHA home finance and a conventional purchase mortgage.

An FHA home finance is made available by the Federal Housing Administration.  The government funds these 1st time home buyer loans to help Americans purchase their first house.  The initial advantage of an FHA home loan is that it does not have strict requirements to qualify.  This is made possible because you will have private mortgage insurance to cover you in case you are unable to make your payments.  Also, the very reasonable 3.5% down-payment helps prospective homeowners to be better able to afford this large purchase.  Closing costs are fairly low, there are no penalties for making payments early, and the more lenient underwriting makes this one of the best home finance opportunities for first time home buyers.

A conventional purchase mortgage is another option.  If you have a great credit score and a little more money saved up, this could be a great option for 1st time home buyer loan program.  You are not required to have private mortgage insurance with this option, so the underwriting is stricter, requiring you to have a higher credit score.  Also, there is a required 10 to 20% down-payment with a conventional purchase mortgage.  After you make the 10 to 20% down-payment, the interest rates you are charged will depend on your credit score and current market trends.

There are advantages and disadvantages to each of these home finance opportunities, so before you make your decision between these financing options for first time home buyers, it would be in your best interest to speak with an expert who can assess your current financial and credit situation along with market trends that determine interest rates.  While you may want to only pay a 3.5% down-payment with the FHA home finance options, you may want to avoid having private mortgage insurance, which is only possible with a conventional purchase mortgage.  Whatever you choose, you will soon be in the home you have always wanted.

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Finding the right purchase mortgage can be an overwhelming experience. If you have decided that now is the time to make your first home purchase, you probably have a great deal on your mind.  Instead of trying to save for a very long time, you can benefit from first time home buyer loans to help your dream come true in an affordable way.  There are various kinds of loans that may interest you as a first time home buyer.  The top most popular options, depending on your qualifications and needs, are conventional loans, jumbo loans for high cost regions, an FHA mortgage, and a VA mortgage.

Buy a Home with Confidence and Choose an Affordable Purchase Mortgage 

There are two purchase mortgage types that may interest you as someone looking for first time home buyer loans.  Fixed rate loans last for 15, 20, 25, or 30 years.  The rate you pay is fixed for the duration of home purchase loans.  Adjustable rate loans change the interest rate yearly depending on the weekly average yield on United States treasuries.  The rate you pay will adjust annually after an initial fixed period of 1, 3, 5, 7, or 10 years.

Then, there are jumbo loans for high cost regions.  Mortgages that exceed $333,700 can be accommodated by these kinds of first time home buyer loans.  Because giving out a higher loan amount presents more risk for the lender, the interest rates for jumbo loans tend to run higher.  Fixed rate loans can be set for 15, 20, 25, or 30 years.

To get approved for FHA mortgages, or Federal Housing Commission mortgage, your situation must comply with limits based on housing types in the specific state and county they are located in.  You can get an FHA loan if you are looking to purchase a house or refinance your mortgage, providing you with great flexibility in obtaining you loan today and refinancing your home in the future.

A VA mortgage loan is available for armed services veterans.  If you qualify, you will be able to get your loan without any money down.  Whether you are currently in active duty, the reserves, or you are married to someone who is, you may qualify for a VA mortgage.  There are both fixed rate and interest rate reduction refinance options, but the fixed rate loan option will be what you will need if you are seeking first time home buyer loans.  These and many other kinds of loans are available to help first time home buyers secure a purchase loan that meets their needs financially.

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First time homebuyers have not been rushing to become homeowners as they have years ago when home mortgage rates had dropped into the 4% range.  The lack of home purchase loan activity has stumped many economists.  Many mortgage insiders are astounded that 4% fixed rates are not enough of a motivation for first time home buyers.  First time homebuyer loan activity will rise when consumer confidence rises.

There are several factors that contribute to lack luster home loan activity in the summer of 2010.  Yes the tax credit for first time homebuyers expired on April 30th.  Sure that was a good incentive to drive first time homebuyers, but this is not the primary reason that home loan application volumes have been faltering the last few months.  If Forrest Gump was hear, he might say, “It’ the loan guidelines stupid.”  According to Ronnie Sullivan at the Mortgage Depot, “Mortgage lenders have tightened loan guidelines to the point where not that many consumers qualify anymore.”  Sullivan continued, “borrowers need to be able to document their income and demonstrate that they have the ability to re-pay the mortgage loan.”

Notable Instances of Mortgage Lenders Tightening Guidelines

1. FHA increased down-payment requirements from 3% to 3.5%

2. FHA reduced the maximum loan-to-value on cash out refinancing from 95% to 85%

3. Most Mortgage Lenders Eliminated Stated Income Home Loans

4. Most Home Loan Lenders Eliminated Down-Payment Assistance Home Loans

5. Conventional Lenders No longer allow a 10 or 20% second mortgage to replace a down-payment & the need for mortgage insurance

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Jul
27

Government Mortgage Help

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Government home financing continues to play a major role in rehabilitating the mortgage industry. In the wake of a severe financial crisis, the Federal Reserve lowered government mortgage rates to record levels.  The two most popular U.S. government mortgage programs over the last seventy years are the VA and FHA loans. VA mortgages are only available to military veterans who qualify with their VA loan eligibility.  However, all Americans are eligible for FHA mortgage loans if they can demonstrate they have the ability to repay the loan.  Government mortgage help is more available and accessible than most people realize.Nationwide brings a significant amount government mortgage loan experience to the table with home financing opportunities for consumers seeking fixed rate refinancing, debt consolidation, new home purchase and cash out refinance loans.

Take Advantage of Record Low Goverment Mortgage Rates

Take advantage of low FHA mortgage rates available for fixed mortgage refinance and new home purchase mortgages.  FHA first time home buyer loans are a popular choice for new home financing.  FHA has been insuring American mortgages since 1934.

The U.S. government guarantees veteran loans and VA mortgage rates have never been better!  If you are a military veteran consider the 100% VA mortgage for refinancing or new home financing.Both FHA and VA streamline loans are available to borrowers seeking a rate and term refinancing who already have existing government mortgages in good standings.

  • FHA Home Loans with only a 3.5% Down-Payment
  • VA Loans with Zero Down-Payment on Home Purchases
  • Streamline Refinancing with FHA and VA
  • No Pre-Payment Penalties with FHA or VA Mortgages
  • No Cost Government Mortgage Help
Government Mortgage

Take advantage of the Nationwide Mortgage Lender’s government mortgage experience and lock your mortgage rate now before the interest rates rise.

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Jun
08

First Time Home Buyer Loans

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2010 has been a good year for Americans to get a first time home buyer loan for several reasons.  First the silver lining of the housing crisis is that new home buyers were suddenly in a position to purchase a home at a discounted price.  For the most part, 1st time home loans have been more affordable in 2010 than it had been in the previous five years.  The other good news for first time home buyer loans has been that home mortgage rates were at all time lows.

Several government home financing programs enabled borrowers to finance a home with hardly any money down.  The FHA first time home buyer loans were available to borrowers who could come up with a 3.5% down-payment.  The VA home loanrequires no money down, but borrowers need a military background for VA loan eligibility.  The other bright spot for new home buyers was the $7,500 tax credit for first time home buyers.   Most industry insiders anticipate that low rat home financing will continue in 2010, but many are forecasting higher interest rates and tighter home loan guidelines in 2011, so if you are considering buying a home there could not be a better time!

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