What is the best
first time home buyer
'What mortgage programs are available for first time home buyers?', I have been a mortgage lender in the St. Louis and St. Charles Mo area for going on 20 years and I seem to be asked that question nearly every day.
That question has meant many different things to the person who was asking, they were looking for easier qualification, less down payment requirement, no down payment, down payment assistance, lower credit scores and so many other things.
In my 20 years as a mortgage loan officer there has never been a mortgage program specifically for first time home buyers, at least not a mortgage program that has different qualification guidelines for first time home buyers and not everyone else. That is not to say there are mortgage programs better suited for first time home buyers.
FHA has always been referred to as the First Time Home Buyers home loan, it is not designed to be specific to them but the loan suits the needs of many who are purchasing their first home.
- Lower Credit Score
- Lower Minimum Down Payment
- Higher Debt to Income Ratio
- Non-Occupant Co-Borrowers allowed
Where the confusion comes in is with Down Payment Assistance Programs such as MHDC or the local grant programs offered in many of the areas. These down payment assistance programs are only for first time home buyers.
The #1 Best First Time Home Buyer Mortgage
I inform all my first time home buyers about all the loan programs available to them and allow them to make their choices but the one more program that provides the most upside to all first time home buyers is the FHA 203k Renovation Mortgage.
This mortgage program has all the benefits of a regular FHA home loan, low interest rates, easier qualification, lower credit scores, higher debt to income ratio, and it allows for co-signers. But, the added attraction to this loan program is that it allows the borrower to add into the loan amount the cost of renovating their new home.
Today's housing market in St. Louis and St. Charles MO is not rich in perfect move in ready homes for first time home buyers. In today's housing market as less and less homes come onto the market the perfect homes will have more competition and higher asking prices possibly bidding wars. Many of the perfect homes that are move in ready are really near perfect and actually could use a little extra work to meet the wish list of the new home buyer.
The FHA 203k Renovation Home Loan fixes all these home problems and allows a first time home buyer to explore every home on the market. Imagine finding a foreclosure, distress home, short sale, or a home that isn't perfect, more than likely this home is priced well below the market value. It's a deal! Plus, it has the size, looks, number of rooms, the school district, neighborhood, and garage that you want but it needs work.
The sink is missing, the carpeting is a green shag, there is very ugly wallpaper throughout the house, needs new windows, you would like new appliances, a modern kitchen, and a finished basement. The FHA 203k makes all this possible and much more.
Why go home shopping without being pre-approved for an FHA 203k Renovation loan? Sure, you may end up finding that perfect home and not needing the FHA 203k but you will find your next new home faster when you have the ability to see all the homes on the market.
Interesting fact, HUD stated recently that after all work is completed on homes with FHA 203k financing that the average retained equity in the home is 22% after only a 3.5% down payment.
Ask yourself this question as a first time home buyer, 'If I could buy the not so perfect home but end up with the perfect home in 3 to 5 months plus turn my 3.5% down payment into much more equity in that same time shouldn't I keep all my options open?' Look into the FHA 203k Renovation Mortgage.
I am a Certified FHA 203k Specialist and I would like to help you get that perfect first home. I work with first time home buyers every day with all loan programs and down payment assistance program. Allow me to do the same for you.