Good news for first-time homebuyers or those who don’t own a home today and want to. The strict regulations that forced so many of you out of the market are easing up.
Downpayments and credit score requirements are changing
It’s been difficult during the last 8 years for first-time homebuyers to get a mortgage. Stats show that today only 1 in 3 home sales are to first-time homebuyers. That’s down from about half. The requirements surrounding credit score, income documentation, or downpayment pushed a lot of first-time homebuyers out of the market.
But the good news is there are new rules for FHA loans and conventional loans — the latter being the kinds of loans from Fannie Mae and Freddie Mac.
First, downpayments have been reduced. Second, credit score minimums have declined — although not all lenders are created equal, so the lender you go to could choose to use higher requirements. And third, downpayments are lower — that’s key for first-time homebuyers. Meanwhile, the FHA has reduced what it charges for insurance premiums.
Yet here’s one thing to note: If your credit score is weak, you’ll be required to seek financial counseling from a certified counselor. That counselor will walk you through how to handle money in general and how to handle the expenses of a home.
My take? I love the requirement for counseling. If we did this all along, we never would have had the foreclosure crisis that hurt our nation so much in the first place.
