Fri, 30 Jan 2009 16:20:00
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Pamela Lamarre and Tracy Dearman
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 Tracy Dearman and Pamela Lamarre |
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With all of the focus on the credit and mortgage markets of late, there is one bright spot in the housing market: Due to declining home prices, first-time homebuyers are finding that homes previously out of reach are now becoming a reality.
It’s a buyer’s market on multiple fronts. Moreover, with both Fannie Mae and FHA offering programs with low down-payment programs — some in the range of 3 percent — first-time homebuyers owe it to themselves to take a look at all that is currently available to them.
There is a multitude of incentives for first-time buyers, just one of which is the $7,500 tax credit offered by the federal government. This is a no-interest loan, which the buyer has up to 15 years to pay back. FHA also allows sellers to offer up to 6 percent 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 highly advisable to get preapproved before enlisting a real estate agent. 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. Borrowers who have been preapproved have more credibility with sellers, a particularly important point if more than one offer is made on a property concurrently. Pre-approval for a mortgage impresses sellers and shortens closing time. And real estate agents are simply better able to help when they know the financing parameters.
Mortgage brokers, whose job it is to connect borrowers with lenders, are involved in the origination and funding of more than 50 percent of U.S. real estate loans. Brokers have connections with hundreds of lenders and are able to navigate the myriad options. Your mortgage professional should be able to narrow down a range of programs based on the information that you have provided and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.
If homeownership is a goal for you, there has been no better time in decades to match low purchase prices with low fixed-rate mortgage loans and conservative, affordable monthly payments. Work on those New Year’s resolutions early. Make 2009 a year for financial action, security and empowerment.
And in the words of author Lewis Carroll: “If you don’t know where you are going, any road will take you there.”
Pamela Lamarre and Tracy Dearman are business partners and head California State Funding Group and HSM realty finance management, respectively. For a free consultation or more information about the mortgage market, email Lamarre at plamarre@sbcglobal.net or Dearman at tdearman@hsmsf.com. For additional information, visit www.hsmsf.com.
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