There are many loan programs for First Time Buyers (FTB). Getting more people into homeownership is one of the goals for the set-up of FannieMae (FNMA) & FreddieMac (FHLMC) & FHA. Homeownership is near its highest in history, up 10% in the last 15 years and at almost 70%. FTB and Sub-Prime loans deserve much of the credit. FannieMae came out with many FTB loans years ago to help people into their first home. Most FTB loans allow easier guidelines on how much house you will qualify for at a given income (debt ratios). Some give a better rate or lower costs if you meet certain income limitations or buy in designated areas. Some have great deals to get you into the house but if you want to refinance or sell, have large penalties and other negatives. Be careful. Choosing the right FTB loan is critical, so choosing the right loan officer & mortgage lender should be your first priority. We can show you many different options of FTB loans and explain the pros and cons of each, so you can make a good decision. Often times, lenders use different names for the same FannieMae FTB loan. Let us help you navigate through all the hype and get a good loan. Most people buying for the first time have little cash to put down so most of the FTB loans address this issue by financing 95%, 97% or 100% of the purchase price. There are many ways to do this. You can do an FHA 97% loan with a gift from a non-profit with seller co-operation for the 3% down, gifts from relatives for 3% or 5% down and more. You can have seller pay most of your costs and get into a house with very little money out-of-pocket (see below for more on this). You need to understand the different loan programs and how they work to make an informed decision. We can help you with this when we meet in person. Read through our website for the preliminary information you need as a FTB. Most First Time Buyer loans will in fact make the same loan to a second or third time buyer. Companies just refer to them as FTB for marketing purposes. Give us a call if one of these options sounds good to you but you've owned a house before.
How You Buy with $500 Out-Of-Pocket The most common way to buy a house with approximately $500 out-of-pocket is to have the sellers pay your closing costs, and pre-paids. Having sellers pay costs works on most 95%, 97%, 100% and other loan programs. Many ask, "Why would a seller pay my costs?" The answer is simple. They want to sell. This practice has been very common the last 5+ years. You basically are paying a little more for the house if you have sellers pay your costs. The sellers are looking at a net calculation of how much money they will be getting at close if they accept your offer. For example, if the sellers are asking $200,000 and you wanted to offer $195,000 instead you may offer the full $200,000 and ask sellers to pay $5,000 of buyer's closing costs and pre-paids. The net is the same to the sellers and you get into a house with less dollars out-of-pocket. As another example, if the sellers are asking $200,000 firm, and you still want the $5,000 toward costs, you might offer $205,000 and ask sellers to pay $5,000 of buyer's closing costs and pre-paids. It's the same net to them again. One important thing to be aware of is that the house has to appraise for the full sales price. You cannot overpay for the house or manipulate the numbers to make them work for you. Your agent will be able to help you determine if this may be a problem on the house you want to make an offer on.
"Must Read" Areas of seloan.com In reality, we would recommend you read the entire
site. Then re-read the critical areas. The more you understand about
what you are doing, the easier it will be for you to choose a loan
officer, lender and loan package. Some critical areas are:
|
|||
|
©
2008 Steve Emory at Pacific Residential Mortgage, LLC. All rights reserved.
