First Time Homebuyers and 100% Financing
Consumer Tips, First Time Home Buyers July 2nd. 2007, 5:28pmI got a call from a new client over the weekend and they had mentioned they don’t believe they can get 100% financing as a First Time Homebuyer. First thing I said was where did you get that information – because it is a false statement.
As a First Time Homebuyer you qualify for some of the best programs at 100% that I’ve seen in a long time. Perfect example a good friend of mine bought a house last month and I got him into without $1 dollar out of his pocket at closing. Will that happen on every purchase no. But with the seller concession and the 100% loan I gave him he got a great rate and still had the money he needed to buy new furniture.Â
I have this loan as an 80/20 option as well to avoid mortgage insurance as well… Give me a call if you have any questions. You don’t have to be a First Time Homebuyer to get this loan either.
2 Responses to “First Time Homebuyers and 100% Financing”
Leave a Reply
You must be logged in to post a comment.
August 14th, 2007 at 8:23 pm
We’ve all heard a lot of stories on the news lately about mortgage companies going out of business, and the companies that are going to survive are companies that are doing FHA loans. What exactly is the difference between an FHA loan and a sub-prime loan? What is the benefit of an FHA loan?
August 27th, 2007 at 5:50 pm
Well, Chalene, that is a great question.
Sub-prime loans were typically given to the people with lower credit scores, unverifiable income and/or no down payment. With all of the changes that have recently happened in the market place, it’s very difficult to get a sub-prime loan without having more money to put down, and most lenders are now requiring you to verify all of your income. With typical sub-prime loans, came higher interest rates.
FHA loans are government backed loans. This doesn’t mean that you have to have great credit…just fair credit. FHA allows you to obtain financing while still in a Chapter 13 BK, or if a Chapter 7 BK was discharged at least 2 years ago. FHA allows a person with NO credit to obtain a mortgage. So, it’s a really good way to finance your home. FHA does require that you have a minimum of 3% into the loan. However, you may obtain a gift for the 3%. FHA’s rates are very competitive (much lower than sub-prime loans), but they do require an upfront mortgage insurance premium (which can be financed) and a monthly mortgage insurance premium.
FHA does not allow unverifiable income, and you can only finance an owner occupied home. But, it is a really great program. Many lenders are not approved to do FHA loans, so many uneducated borrowers end up getting a high interest rate sub-prime loans.