Over the last two years, the loan and real estate industry have faced a lot of changes. As a first-time home buyer, you would definitely want to be aware of these changes. Here we bring you an updated guide that will help you pursue your goal of homeownership.
Top 10 Things to Consider When Buying a Home
Below are 10 things a first-time home buyer should know
1. It’s easy to qualify for a loan.
We’ve been looking at this trend for the last two years. Today, most lenders are accepting lower down payments and higher debt levels for borrowers. This year, some new home buyers will be qualified for a traditional loan with lower down payments. Also, the maximum debt level has gone up as well. These changes will enhance access to financing in the months to come.
2. Debt limits have gone up.
Last year, Fannie Mae stated that it would begin purchasing loans with borrowers.
New home buyers should know this, as it could make loans easier to get— especially for those borrowers with higher levels of debt.
3. Home prices are rising gradually.
Across the country, the local real estate markets have experienced a cooling trend last year. This suggests that prices may rise more slowly this year. Some cities may see some huge gains. As a first-time buyer, you should know this as it affects your buying power.
4. Loan rates are expected to soar.
Last year, a forecast predicted that thirty-year loan rates would climb by the last quarter of the year. They predict rates to rise in the second half of this year. New home buyers should know about these trends and forecasts as house values are also expected to grow.
Read About : Types of Home Loans for First-Time Buyers
5. You don’t need a down payment to buy a home.
Surveys show that many people think that they need to go for a down payment when purchasing a home. Today there are programs that allow less of a down payment. The FHA loan program needs a low investment. VA loans provide financing for qualified borrowers like military members and veterans. Also, some credit union programs are providing financing to first-time buyers.
6. Inventory is limited in many local housing markets.
Low housing inventory was one of the buzzing stories of the last two years. This means this year we would see supply shortages in many cities nationwide. However, there are exceptions to this trend. In many local housing markets, there is not much supply to meet the demand. As a first-time home buyer, you should know this because it affects everything from your offer to your negotiating power. In this kind of market, sellers would like to have more negotiating ability.
7. FHA loans are more expensive.
Last year, a reduction was seen in FHA loan insurance that would’ve saved borrowers hundreds of dollars per year, but HUD cancelled this reduction. Therefore, first-time buyers who use the FHA loan program will continue to pay the raised loan insurance levels.
8. Many home loans carry credit scores.
A report from Ellie Mae states that most closed home loans were issued to borrowers with credit scores of six hundred or higher. A tiny number of purchase loans are offered to borrowers with scores in the five hundred range. The vast majority of purchase loans went to borrowers with scores of six hundred or higher. As a first-time home buyer, you should know this trend.
9. It is essential to have a real estate agent.
The housing market has changed over the years. Today, many local markets are facing inventory shortages, making it more difficult for first-time home buyers. Therefore, it’s important to have professional guidance from an expert real estate agent.
10. We have a lot of knowledge to share with you!
Over the past few years, we have been educating first time home buyers. Find out if you are eligible for the first time home buyer program in MA (Massachusetts). We offer first time home buyers loan advice and help you to make informed decisions.
Keep visiting us for more information.