OfflineIn a direct contradiction to the previous article, an article in the New York Times is predicting fewer first time home buyers for some time to come. The article cites tight credit and eager investors buying up lower priced inventory as two major factors.
A survey of real estate agents indicates that first time home buyers as a percentage of all buyers are down from a normal 40% to 31 percent. Surveys also show that first time buyers are relying very heavily on low down payment mortgages from the FHA, as they can still get a loan for as little as 3.5 percent down. However, fees are being raised for these loans and the financially troubled agency is indicating that fees will continue to rise.
With cash rich investors scooping up the lower priced properties and tight lending standards, first time buyers are just not finding homes they can buy. Far more of them aren’t even looking, as they don’t see success as possible. Interest rates may be great, but only if you can get a mortgage.
Other surveys show that an increasing number of young buyers are relying on gifted money from their relatives to make their down payments. However, lenders see this trend as well, and they are carefully scrutinizing these gifts to make sure they’re really not loans.
Our last 4 fix/flip houses were purchased by 1st time buyers; they used USDA loans. The great thing is that they only need about 625 credit score; can borrow 102% of the appraised value of the house; and we as the seller can still give back up to 6% of the purchase price toward closing costs.
On a 40,000 property, they borrow 40,800; we can give back 2,400 for closing costs, so between the extra 800 + the 2400 = 3200, which covers most of their closing costs, they are buying with very little to no money down, close to 100% financing.
The great selling tool is that the PITI payment is around $ 325 per month, which is about half of what that house rents for ... that's a no brainer!
Dean here's the best shot I can garner for what might fit for your plans with respect to your real estate investing goals. I searched it hard and long, but
now I can say with confidence that these results are good!
1. I live in Fruit Heights, Utah
2. The unemployment rate is for the county I've chosen 3.7% 2012 was
5.2% 2011
3. Average Rent $675
4. Average cost of 3BR, 3bth $98K
5. Taxes average $700.00 to $800.00
6. The average days on market 60 to 75
I would be thrilled to death to get to work with you Dean.
Thanks for all you and Matt do for the average guy..
Kind Regards, Phil Lully
Living to Help Others Find Their Own Freedom!
It is essential for first home buyers to understand the need to get a pre-approval letter from their lender before they go shopping for a home. Not only does it speed up the closing process but it places them in line with investors as they are in a position to quickly make offers on new listings.
I recently wrote a blog article "First-Time Home Buyers: Finding Foreclosure Deals" which gives some pointers on where to look and when to act.
That's great awesome way for people to buy a house it allows them to do so and helps us investors out. Nice
Quitting is forever pain is temporary
I've come into contact with a lot of people buying homes for the first time. Our market presents a paradox of sorts: On one hand, the low property values afford certain opportunities that have not been seen in some time. But for our young people - a lot of them graduating with tattered credit and student debt (coupled with stricter lending requirements), it seems to be out of reach. I wrote an article recently, "Rent to Own Homes: When Does it Make Sense?" that talks about the decision a lot of first time home buyers are faced with: Does it make sense to spend considerably more on rent payments to be able to ultimately (possibly) purchase the house. I'll remark that now is an interesting time to be buying a home for the first time.
Daryl McCormick - http://www.homestarsearch.com
Very interesting post! I will be googling these loans. If you have a short cut to information or forms for this I would appreciate it! Thanks for the info!
~kc
FHA has some good programs for first home buyers:
FHA 203(b)(http://www.fha.com/fha_article.cfm?id=210) loans require a minimum of 3.5% down. You can also wrap most of your closing costs into the loan. This is the only loan where 100% of the down payment can come from a gift from someone like a relative or a government assistance agency.
203K Rehabilitation Program (http://www.realtor.com/home-finance/homebuyer-information/what-is-an-fha...) is offered through HUD and allows you to roll the costs of renovation into the loan. It also carries a minimum down payment of 3.5% on the total amount financed.
FHA Growing Equity Mortgage (http://www.fha.com/growing_equity.cfm) is designed for first home buyers whose current income is too low to qualify for a standard loan but they expect their income to increase down the road. The loan payments start small and increase gradually over time.
Thank you gceriani for your USDA tip, and campbellsimon for your FHA Loans for First Time Home Buyers. This tips will help Investors too in making their sales pitch to sell houses to First Time Home Buyers.
MOST ppl have way TOOO much debt to income ratio (DTI)
Best time to borrow is when you Don't need it- be responsible and live on a BUDGET!
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools