FHA Loan

So you are a First Time Home Buyer or at least you are considering buying a new home. You have heard that you can own a new home for less than what you would be paying rent on a comparable place. You want to own because you want a place to call your own, you hate the neighbors in the apartment next to you, your landlord never responds, you want to change the color of your walls, your apartment is just way too small. Whatever your reason for looking to own your first home, this is a great time to be considering making the move!

The 2 Big Worries of Most First Time Home Buyers: Getting Approved and Money to Close

By now we have all heard that it is harder now to get a new mortgage than ever before. That you have to have a 20% down payment. That lenders are saying NO, that banks aren’t lending, and that home sales are way down and foreclosures are way up. Well, some of this is true and a lot is false.

Before the sub-prime lending market fell apart it was very easy for nearly anyone to get a new home loan, it was too easy. I recall a loan program where if you had a 580 credit score, your debt to income ratio was at 50% or less, you didn’t need a down payment and you were at least one day removed from your Bankruptcy discharge then you were qualified to buy a new home.  Ironically, except for the one day out of Bankruptcy I can still get many first time home buyers a mortgage through FHA financing who have these qualifications.

Not everyone can qualify for a new mortgage, some who want to own their own home just have not earned the ability to have a lender provide them the funds to buy. But, is it impossible for MOST home buyers to get a mortgage to purchase a new home…NO!

There are 3 basic loan programs to work very well with first time home buyers, USDA, VA and FHA. USDA is a great 100% financing program for low to moderate income home buyers who want to own a home outside of urban areas. The VA mortgage program is for Veterans and those serving our country in the Armed Forces, another great 100% financing program. But, the number 1 loan program for owning your first home is the FHA mortgage.

FHA Mortgage Qualification for First Time Home Buyers

Since every lender has their own rules or overlays to getting an FHA approval, I will only speak about what I can do. FHA has their own guidelines that every lender has to abide by, but many overlay these rules with their own guidelines that make getting approved a bit more tedious. At USA Mortgage we have the ability to approve your mortgage straight from the FHA underwriting manual, this makes getting your new home much easier.

We want a minimum of a 580 middle credit score of your 3 available scores, this 580 score doesn’t mean an automatic approval it is just the number we need to get you to the starting line. An underwriter will take careful consideration of your credit history to determine if you have the WILLINGNESS to pay your credit obligations. Are you paying your credit obligations on time and as agreed then you have a very good chance of being credit approved. Truly, it is that simple.

Next we will look at your ABILITY to pay your obligations, this is a simple ratio test. We will take your monthly gross income and compare it to your potential new house payment and most if not all of the credit obligations we find on your credit report. If you fall at or around the debt to income ratio guideline then you are income qualified. The debt ratio for contained within the FHA guidelines is 31% for your new house payment and 43% for your total debt to income ratio. These guidelines are NOT absolutes, I have received approvals with total debt to income ratios as high as 50%.

Getting approved for a new home loan especially for first time home buyers who utilize the FHA mortgage programs will find that it is not overly difficult. I usually have an answer for you within the course of a day, many times much faster. Would you like to have a professional evaluation of your ability to qualifying for a new home loan? Please, feel free to contact me. If I can’t get you approved for a new mortgage today, we will set a plan in motion that will get you there. If you want to learn more visit http://www.bobrutledge.com/FHAMortgageMissouri or http://www.bobrutledge.com/FHAlessthenperfectcreditmortgage.

I Don’t Have The Money Saved For a Down Payment

This is the second concern of many First Time Home Buyers, mostly because they keep hearing that it takes a 20% down payment to get a mortgage approval. BALONEY! The minimum down payment for FHA is 3.5% of the sales price, USDA and VA has no minimum down payment requirements.

There are many places for a first time home buyer to come up with the required down payment for an FHA mortgage, in fact in the FHA underwriting guidelines they mention 24 different resources a first time home buyer can use for down payment. When I first visit with a potential home buyer we go over that list and they are amazed at the fact that they did have the down payment available to them.

But, keep your money in your pocket. There are many groups that provide down payment assistance to first time home buyers, the State of Missouri has a nice program, Florissant, Wentzville, St. Peters, St. Charles, O’Fallon, Dardenne Prairie, Weldon Springs, St. Paul are just a few of the cities around the St. Louis area that offer down payment assistance, Then there is St. Louis County, St. Charles County and Jefferson County that has down payment programs too. Funds available for down payment help can range from 3% of the loan amount with MHDC or from $3,000 to as high as $10,00o from the local government agencies. If you want some help with down payment assistance programs and qualifying for these programs please feel free to contact me or visit http://www.bobrutledge.com/FHAdownpaymenthelp

Getting a New Home With Little To No Money Out of Pocket

Now you know there are mortgage programs for first time home buyers that don’t require a down payment, that there are programs that provide down payment help but what about the remaining costs to getting a new home. Besides the down payment there are costs that are referred to as closing costs. In today’s housing marketing it is not unusal to have the seller of your next new home pay for your closing costs, this is considered standard and acceptable. With FHA in many instances the seller can pay up to 6% of your closing costs.

As a lender I can help pay your closing costs too, for nearly all my first time home buyers I have been paying for the cost of the appraisal and waiving all lender closings costs. This has helped with keeping your money in your pocket as well as making it much easier to negotiate with the sellers as they are not giving up that money from the sale of their home. If you would like to learn more about this special first time home buyer program visit http://www.bobrutledge.com/FHAlowinterestratesnolendercosts

Atlanta residents are very familiar with ‘The Godfather of Atlanta Real Estate’, John Adams.

John has been talking real estate on the radio in Atlanta weekly for over 20 years, as well as writing his weekly real estate column in the Atlanta Journal-Constitution. And, weekly, I am his guest on the show talking mortgage and mortgage loans.

Last week, I was in studio with John for his show for the whole two hours, on WGKA 920AM, and the topic of conversation turned to first time home buyers in Atlanta. You can listen to a replay of that show HERE.

Young professionals, we heard from one caller, do not have the goal of buying their first home very high on their list of priorities. They may be comfortable renting rather than buying, in part because they are not comfortable with the economy in general, and are afraid of losing their jobs and needing to relocate, possibly, to find work.

While uncertainty in the economy is at a high right now, no doubt, there is a flip side to that argument.

Right now, we are seeing a perfect storm in the Atlanta real estate market. To review:

• Atlanta mortgage rates are at ALL-TIME lows
• Metro Atlanta home prices are very, very depressed from their highs
• Atlanta area rents are stable and rising, and expected to rise on average over 10% over the next couple years
• Great management companies exist, and will compete for your business if necessary

There will be a Free First Time Home Buying Seminar on September 24, 2011 at the Christiana Hilton Hotel in Newark, DE from 10 AM till Noon and again from 1:00 PM till 3:00 PM.  The seminar will cover everything you need to know in order to purchase a home in Delaware, Maryland, or Pennyslvania.  The seminar will cover FHA Loans, VA Loans, USDA Rural Housing Loans, FHA 203k Loans, and conventioanl financing.  We will cover first time home buyer programs that are available.  The seminar will walk you thru the whole process from budgeting, to credit, to pre-approval, all the way to shopping for a home.  Each participate will receive a Free Credit Scoring Handbook, Free Home Buying Handbook, Free Budgeting Worksheet, and the oppurtunity to get a copy of your credit report and be pre-approved for a loan.

It is free to register for the seminar and you can register by calling 302-703-0727 or by sending an e-mail to Delawaremortgages@yahoo.com.  You can also register online by clicking one of the link below:

Delaware Home Buyer Seminars

The address of the seminar is The Christiana Hilton Hotel, 100 Continental Drive, Newark, DE 19713.  Two session to choose from 10 AM till noon or 1 PM till 3 PM.  You can visit Delaware Home Buyer Seminars for more information or for other seminars.

The seminar is being presented by the author of the new book, Your Guide to Buying Your First Home in Delaware.

If you feel like you won’t qualify for any reason, then don’t worry you can get signed up in our Free Get Mortgage Ready Program, which is a step by step program to help you budget, clean up your credit, and get your ready to buy a home.

If you would like to apply for a pre-approval to buy a home you can apply here.

John R. Thomas – Certified Mortgage Planner – Primary Residential Mortgage

NMLS – 38783

302-703-0727 DE Office 

248 E Chestnuthill Rd, Newark, DE 19713

www.DelawareMortgageLoans.net

http://www.prmidelaware.com/

The real estate market is flooded with foreclosures, short sales and bank owned properties.  First time home buyers in Wisconsin are really in a great position to buy a home, because interest rates are still at an all time low and the sales prices of home have come down quite a bit.  It can be exciting buying that first home, but first time buyers need to be prepared when it comes time to get a mortgage.

Here are a couple of important steps first time home buyers in Wisconsin need to know.

Get Yourself Pre-Approved

A pre-approval letter is extremely important in today’s market.  The owner selling the home knows that getting approved for a mortgage is much more difficult than it was just a few years ago.  The seller will require a pre-approval letter with your offer to purchase.  The real estate agents know this as well.  Lots of agents won’t show you homes unless you can show that you are already pre-approved.  Learn more about the pre-approval letter at The Importance Of A Pre-Approval Letter.

How Much For A Downpayment

There are still many mortgage programs to choose from, but it really comes down to a conventional mortgage or a government mortgage.  Most conventional mortgage programs require a minimum of 5% of the purchase price for the down payment.  A couple of government programs allow no down payment, but you have to be active or a veteran of the military or buy a home in a qualified rural area.  The next best government program for down payment is FHA, which only requires a 3.5% down payment.  The FHA mortgage program has become a very popular program lately.  Learn more about these programs at First Time Home Buyer Mortgage Programs In Wisconsin.

It’s very important first time buyers work with an experienced mortgage person.  There are lots of options available and you need to make sure you are choosing the right mortgage for your situation.

Even though first time homebuyers often utilize FHA financing, it’s important to know that the Federal Housing Administration is not exclusive to 1^st time homebuyers.  In fact, FHA loans can be used again and again by buyers that meet FHA qualifying guidelines.  Whether you’re interested in purchasing a home or refinancing, an FHA mortgage might be your best option.

However, there are a couple of guidelines that could keep you from qualifying for an FHA loan.  FHA does not allow the majority of homebuyers or homeowners from having more than one FHA loan at a time.  There are exceptions to this rule as I spelled out in my recent post Two FHA Loans at the Same Time | Is it Possible? 

Benefits of an FHA Loan

• The minimum down payment required is 3.5%
• FHA accepts many alternative sources for the down payment including gifts from family members
• FHA allows for less than perfect credit
• There are low closing costs, and all mortgage insurance can be financed
• Sellers can contribute up to 6% towards buyer closing costs
• FHA permits a borrower to have a co-borrower assist with qualification even if they’re not going to occupy the property
• There is a higher debt-to-income ratio associated with FHA loans. Usually a lender will require that the monthly payment on your home mortgage loan not be more than 28% of your income for that month, and that all of your other debt payments not exceed 36% of your monthly income. With FHA loans, your monthly payment can be up to 29% of your monthly income, and your other debt payments can be up to 41% of your monthly income. In some cases your debt-to-income ratio can be higher, if you can justify the increase.
• Non-citizens qualify for minimum down payment home mortgage loans.
• FHA mortgages are assumable.  While this option hasn’t been popular in recent years, our current low interest rates may bring them back around. 

To learn more: Check out our FREE Top 20 Homebuyer Secrets that can save you thousands of dollars! Plus browse our Home Buying Resources section and fill-out a free no-obligation secure online application or call us in Colorado Springs, Colorado at 719.387.1368 with any questions.

Bad credit or No credit?  Check out our Credit Repair Program and get started on the path to homeownership today!

 Overcome loan application stage fright by reading my Simple Steps to a Complete FHA Loan Application