A thriving economy, growing unemployment, and a bleak long-term forecast make for excellent financing conditions for first-time homebuyers. Consumer confidence is also being harmed by a widespread malaise bordering on depression, driving financing opportunities—wondering about financing a new home? Here’s what some of the country’s best real estate gurus have to say.
- Don’t take everything you read at face value
Could you take it as a clue? Don’t try to time the market; instead, sit tight and wait for the right time to buy. That could be a significant blunder because there may never be a perfect time. No one can predict how the real estate market will perform in a week, let alone six or twelve months. If consumers are ready to buy and have everything in order, including credit ratings and funds, they should browse around for the best bargains.
- Make a good job of it
It’s essential to have a mortgage contingency. Buyers must have a mortgage contingency written into the contract in this unpredictable real estate market. The lending landscape has shifted dramatically in recent years. Once purchasers had a contract, it was expected that obtaining a mortgage would be a piece of cake.
- Loans from the Federal Housing Administration (FHA)
The Federal Housing Administration (part of the Department of Housing and Urban Development) was founded to assist first-time purchasers. They can borrow anything from $271,050 in low-cost places to $729,750 in high-cost cities like Los Angeles or New York for single-family homes.
The following are some of the advantages of an FHA loan.
- Easy to qualify
Because the FHA ensures the loan, lenders are more willing to lend to borrowers with less-than-perfect credit. The FHA does not use credit scores to determine eligibility or interest rates.
- Lower cost
FHA loans are more likely to be competitive or offer better rates than commercial lenders because the federal government backs them.
In many ways, financing a new home is similar to getting a mortgage to buy a resale home – but there’s a big difference. Builders of newly-built houses may offer attractive financing packages, either directly through their mortgage subsidiary or through an affiliate, in addition to shopping around for rates and terms from banks, mortgage firms, brokers, and online lenders.