Jerry Hall

YES, FIRST TIME BUYERS HAVE OPTIONS!

As a first-time homebuyer, you’ve probably heard that qualifying for a mortgage is a little harder than someone who walked in your shoes two years ago.  The credit crunch on Wall Street and record foreclosure rates have made investors nervous about home buyers who have small down payments and low credit scores.  However, while the number of first-time buyers is down, plenty of folks are tempted by falling home prices and low interest rates!

The kind of loan you’re offered starts with your credit score.  There’s no question that the stronger the credit of the borrower, the better product they can obtain.  If you go with an FHA loan, you can put down 3% and the minimum credit score is 580.

Who is considered a good FHA candidate?  More and more homebuyers are qualifying daily.  With FHA, a parent can provide down-payment assistance, which beginning January 1, 2009, will increase to 3.5%.  Lenders would normally say they’d like to see approximately 28 to 30 percent of your gross income going against your housing expense.  And of course, debt ratios less than 42 or 45 percent of your gross income will keep you in contention.   

Another 100% financing program is the USDA Rural Development Program.  Borrowers who satisfy household income limits and property location requirements are eligible, and need NOT be first-time homebuyers.  But keep in mind, they may not own any other property and must carry monthly private mortgage insurance.

The $7,500.00 Tax Credit Program enables the first-time buyer to get a 15-year interest free loan.  This money can be used to pay down or pay off debt, improving the borrower’s monthly cash flow.  And, repayment ($500 per year) doesn’t begin until the third year after closing.

VA loans are also an excellent 100% financing program.  Veterans can use the VA program more than once, and does NOT require monthly private mortgage insurance.

For additional information, contact Jerry Hall at (614) 410-9118.