With all of the focus on the credit and mortgage markets of late, one of the bright spots in the housing market – and there are several – is that first-time home buyers are finding that homes previously out of reach are now becoming a reality, due to declining home prices.
With both Fannie Mae and FHA offering programs with low down-payment programs, some in the range of 3%, first-time home buyers owe it to themselves to at least take a look at what is available to them.
There are other incentives for first-time buyers, such as the $7,500 tax credit offered by the federal government. This is a no-interest loan, and the buyer has up to 15 years to pay it back. FHA allows the seller to offer up to 6% of the purchase price back to the buyer in the form of a seller credit. This credit can be used toward such items as closing costs.
It is advisable to get preapproved before going to a real estate agent.
There are a couple of reasons for this. Real estate agents, before spending time and expense to show potential buyers houses, want to know that their clients can in fact afford the houses they are being shown. The other reason is that borrowers who have been preapproved will have more credibility with sellers if more than one offer is made on a property at the same time.
Borrowers, once they qualify for financing, should always employ the services of a good real estate attorney and have him or her review everything before signing.