Are you looking for your first home? A Realtor.com survey reveals some interesting things about those looking for their first house, including some difficulties that affect many house hunters in today’s markets.
The Realtor.com survey, conducted between March and June 2019, includes some demographic data about those exploring today’s mortgage rates and looking for suitable homes:
- 25 percent have been looking for a home in the past month
- 21 percent have been looking for 2-3 months
- 15 percent have been looking for 4-6 months
- 9 percent have been looking for 7-12 months
- 24 percent have been looking for more than a year
And of that number, some percentages regarding problems house hunters are facing today. According to the survey, one of the main problems is locating an affordable home within the house hunter’s budget. Another issue is finding property that meets the needs of today’s house hunters. Other issues include:
- 35 percent are just starting to explore
- 29 percent don’t have down payment funds
- 24 percent haven’t decided on a specific place to live
- 23 percent need to improve their credit score
FHA home loans can help address several of these issues, directly or indirectly. The down payment problem is supplemented by the FHA’s low down payment requirements (lender standards will also apply) and also the fact that FHA loans allow down payment assistance from approved sources.
The fact that FHA home loans permit seller contributions toward closing costs is another way first-time home buyers can get ahead with the down payment issue. Sellers cannot contribute funds toward the down payment but any seller contributions toward closing costs will free up the borrower’s money that would have been paid for THOSE costs.
The borrower can transfer the money they would have paid to close (the same amount as the seller contribution) to the down payment instead.
Improving credit scores is a key part of getting ready for an FHA home loan, but FHA mortgage loan credit requirements are lower than those for some conventional mortgages and it always pays to comparison shop between FHA and non-FHA mortgages.
But it also pays to work on your credit scores as well. Establish a year or more of on-time payments for all financial obligations, lower your credit card balances below half your credit limit (lower than half is better but the halfway mark is an excellent starting goal), and avoid opening new lines of credit.
You should also beware of closing OLD lines of credit as the age of your accounts is a factor in your credit score.
First-time home buyers may not have it easy-there is a lot of research, planning, and saving to do-but the results are well worth the effort.