First-time home buyers have new opportunities for home ownership.
This May, the new regulator for Fannie Mae and Freddie Mac plus the secretary for HUD made announcements that they are going to make some policy changes so that first-time home buyers will find credit more attainable. This is in response to the recent housing recovery coming to a sudden and inexplicable halt after months of tremendous strides forward.
The Decrease in First-Time Home Buyers
Some professionals are blaming the halt on a tight and over-priced mortgage market while others point the finger at the decrease in first-time home buyers. Whatever is to blame, these government agencies are thankfully looking for ways to amend the problem. Mel Watt, the new director of the Federal Housing Finance Agency, has already announced that the maximum loan amounts for Fannie and Freddie will stand at the current $417,000 despite rumors that there were plans to lower it. Mr. Watt, who is in charge of overseeing the workings of the two major mortgage lenders, is attempting to ease the minds of banks who still feel leery when dealing with Fannie Mae and Freddie Mac products. This is in direct contrast with the purpose of the programs, which is to make funds for housing more accessible to consumers.
Reducing Mortgage Insurance Premiums
Meanwhile, HUD secretary Shaun Donovan is proposing changes aimed directly at the first-time home buyer market. This fall, the FHA will start a 4-year pilot program that allows first-time home buyers a reduction in the insurance premiums on their loans if they commit to credit counseling. The average FHA loan balance is roughly $180,000. With this trial program, a first-time home buyer could potentially save $10,000 over the course of the mortgage just by taking classes in money management skills.
As home prices continue to rise, being able to afford a home has become a concern for potential home buyers. With these reductions in mortgage prices, they can offset the increased price of the home with a better priced mortgage package. The best way for a new home buyer to take advantage of these changes is by utilizing a service like Sean Z’s TBD mortgage program. To be determined lending looks at the borrowers history as opposed to the value of the home they are interested in. A first-time home buyer can be approved through this TBD program first, find out how much house they can afford, and then start looking for one that falls into their criteria.
A Better Opportunity to Buy a Home
By easing the mortgage pricing, first-time home buyers are going to find that they can afford more house than they thought possible. With luck, this will spark a growth in home sales as this lagging portion of the housing market is given better opportunities to buy a house. The FHA is realizing that the loss of the first-time home buyer has a great deal to do with the sudden slowing down of the housing market. By targeting this group and encouraging new homeownership we should start to see more growth.
If you are considering buying your first home, now is the time and Sean Z is the one lender who can help you. With him, gain the confidence you may need to start your homeownership journey by finding out first what your spending limit is. Call SeanZMortgage at (314) 361-9979.
Photo credit: are you my rik? via Flickr