Tag Archives: FHA mortgage

First-Time Homebuyer Tips

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The Lenders Network quoted me in First-Time Home Buyer Tips and Advice from Top Mortgage & Real Estate Experts. It reads, in part,

If you’re in the market to purchase your first home, then you know there’s much for you to learn. First-time homebuyers often make many mistakes they wish they didn’t. You’re making the biggest financial decision in your life, you want to make sure you don’t make any mistakes. So we asked mortgage and real estate experts what advice they would give first-time homebuyers.

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8. Look into a HomeReady HomePath Loan

“Many first-time home buyers look to Federal Housing Administration –insured mortgages which have low down payment requirements.

Fannie Mae and Freddie Mac both offer loan programs to lenders who lend to first –time homebuyers of one-unit residences.

These programs have down payment requirements that are as low as 3 percent. Fannie’s program is called HomeReady.

It defines a first-time homebuyer as “An individual is to be considered a first-time home buyer who

1. Is purchasing the security property;

2. Will reside in the security property as a principal residence; and

3.  Had no ownership interest (sole or joint) in a residential property during the three-year period preceding the date of the purchase of the security property.

In addition, an individual who is a displaced homemaker or single parent also will be considered a first-time home buyer if he or she had no ownership interest in a principal residence (other than a joint ownership interest with a spouse) during the preceding three-year time period.”

Reiss on FHA Mortgages for First Timers

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MainStreet quoted me in FHA Loans Can Be A Good Option for First-Time Homebuyers. It opens,

FHA loans can be an attractive option for consumers purchasing their first home, because they require much smaller down payments.

First-time homebuyers often consider these Federal Housing Administration loans, because they do not require a large down payment or high FICO scores unlike traditional 30-year fixed mortgages. Given that young households tend not to have the savings for a substantial down payment, they can be an attractive option, David Reiss, a law professor at Brooklyn Law School.

Because FHA loans are mortgages insured by the Federal Housing Administration, this guarantee reduces the risk of “loss of principal for lenders, which is advantageous for borrowers,” said Joseph Cahoon, director of the Folsom Institute for Real Estate at Southern Methodist University’s Cox School of Business School in Dallas.

This results in some consumers being able to put down as little as 3.5% for a down payment towards the purchase of a new home. For many first-time Millennial homebuyers, the prospect of saving 20% for a standard down payment has been challenging during the past several years because of a combination of low growth in wages and high student loan debt.

“For those borrowers with good credit, FHA insured loans offer a good pathway to home ownership, he said.

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“Homebuyers should compare all of their options before going with an FHA mortgage,” Reiss said.