2012: The Year for First Time Home Buyers
>>> Update: Find out why 2012 is also the year for home improvement loans. Also check out the video below for some 2012 first time home buyer credit tips.
Low interest rates, low prices, great deals...it's definitely the year for first time home buyers. In fact, did you know that interest rates are at 60-year lows right now (for most buyers*)? With rates below 4% for some loans, it's a shock to those who remember paying 12-15% interest rates in the past. Those low mortgage interest rates alone may sway many borrowers into at least considering buying a house. Couple that with low prices from dropping values and foreclosures, and you have yourself a buyer's market. First time home buyers have several mortgage loan options when it comes to tackling this buyer's market. Let's look at a few scenarios.
You have the HomePath mortgage option to help buy Fannie Mae-owned properties - often below market value. Fannie Mae owns properties all over the country after the foreclosure wave of the last few years. But it's not in the business of holding properties. Fannie Mae would much rather see qualified home owners in these houses. That's why it offers HomePath financing. You can get into a lower-priced home with a smaller down payment than other loan options. It's great for buying that first home.
You can use FHA 203k to buy a foreclosed or vacant home and fix it up, turning it into exactly the home you want. A recent study shows many home buyers are putting thousands of dollars into more recently-built homes to add their own taste and style to them. You can do this, too. Or if you find a house that needs some TLC, you can have the work professionally done and finance the work directly into the mortgage. The FHA 203k covers a lot of improvements from required (like flooring, mold removal, lead-based paint abatement) to desired (new appliances, new windows, a deck).
You can use a USDA rural development mortgage to get into a home with no down payment. No down payment does not mean you can't get a house. You can buy a house with 100% financing if the house falls within the USDA guidelines for "rural." This doesn't mean you have to live way out in the country in an old farmhouse with no neighbors. Rural actually covers smaller towns and villages, townships and other areas that may surprise you.
Check out the video below for some 2012 first time home buyer credit tips:
These option and low interest rates make for a great opportunity to get out of those apartments and rental houses and become a first time home buyer in 2012. Get started by downloading "The Essential Guide to Buying Your First Home" at the button below.
*Interest rates and fees are based in part on FICO credit scores. The higher your score the lower fees and rates you will typically pay in the financial and lending world.
(2012 photo courtesy: Flickr user Dan Moyle)