Loan Options for First Time Home Buyers & Credit Scores!
No/Low Down Payment Options for Home Buyers
What Loan?? What is my credit score??
Buying a home for the first time can be stressful and nervous. So many moving parts. The best advice is to hook up with a Realtor you trust and a Lender you trust. Most often, the Realtor will be able to refer you to a few lenders to choose. Buyers need to understand credit reporting and loan options with no or low down payment requirements. USDA and FHA tend be the most popular options.
Understanding the Credit Score for Home Loans
First time buyers sometimes don’t even know they can even qualify. They assume their credit score is not very good or that they can’t cave up enough money. The factors are necessary, but these Soon-To-Be Buyers needs some education on the process. When applying for a home loan the buyer will complete an application and provide the lender necessary income documentation & asset information. The lender then pulls a tri-merge credit report. This is important as it is pulling the Equifax, Transunion and Experian. This is very important because most banks, car loans, credit cards only pull one bureau for their qualifying purpose. So, this means when your buyer is getting their monthly credit score update from their bank or credit card company, they may only be getting 1 score by 1 bureau. A mortgage lender will have all 3. They then ignore the lowest score reported and the highest score reported. They use the middle score. Keep in mind, the highest and lowest bureau reporting may not always be the same for you or another buyer. Each creditor reports to different bureaus. So the buyers middle score could be from Transunion and their spouses middle score could be Experian. Never rule out you have “bad credit” or “amazing credit,” let the lender be the judge on that.
Buyer Loan Options with No/Low Down Payment
There are some great loan options for first time buyers that require No or Low down payment option. So, all that money the buyer things they have to save may not be the case at all. USDA is a government loan that require No Down Payment for rural areas. They have a cap on price for the different counties and they have a income grade for number of people in the household. This is not a low income loan, as the income caps are fairly comparable to the income in the different counties. Depending on the market, it is possible to get the seller to pay for closing costs. Which then, in return, allows for very little money by the Buyer.
Now there is, also, the FHA government loan program. This one has more flexibility with lower credit scores and income and price caps. It does, however, require 3.5% down payment. This down payment can, also, come as a gift from a family member.
3rd Quarter Market Update for Sonoma County
What is happening with the Windsor Real Estate Market?
Windsor….how does it hold up to the other cities it borders?
Our market has been very interesting, especially with the late winter we had. I put a listing on at the beginning of the year and got some real good action, but it all came to a halt when we got our first rain…uh….storm. We had so much rain we flooded in a lot of areas around us. And with rain comes house problems: roof leaks, blown down fences, leaking windows, etc. No one was looking at houses. We had a couple of open houses and we basically had neighbors stopping by. But, then we got some great weather….for about a week! Next storm came rolling in, and another and another. Spring Break got our market moving again, along with the Sun!! Sold that home within a week. People were motivated to get out of their homes and start the search. Also, spring break, gets those motivated to Sell knowing school gets out in less than 2 months! Families like to sell homes and moving during the summer so their is no disruption with school. This trend I have seen in my 19 years in the business and it still holds strong today. SO…how are we doing? Well, we are doing great. Average days on market is less than 30 days, since May 1. And if your home is “turn key” reading to just unpack your belongings, those are on market even shorter. I have, also, seen homes going quick with entertaining backyards: lights, grass, fire pits, out door stoves, established flowers & trees. Welcome to 95492, where the medium price range goes quick. If you are looking to Sell, it’s not too late to put your home on market. If you are looking to buy, be sure you are pre-approved and ready to ponce as soon as that house hits the market!! Not much time to “think about it.” My take is that even with all the inventory out there, we still just don’t have enough Medium Priced homes for the active buyers out there. -Mandy Corriea, W Real Estate
Thank you for the advice but I need to talk to the Professional:
Outdated Advice may be given to you by family and friends. Let me give you advice with today’s market trends.
You are ready to buy or sell your first home and your friends and family, who have been through the process have all this advice for you….But, most of it MAY BE Outdated Advice.
Market’s change so often, especially here in Sonoma County. We have had some chain of events that have kept us very volatile. Low inventory, high rates and then a ton of over priced inventory after fires. Now inventory is picking up but then we had a very long, wet Winter/Spring that slowed that process….and now, School it out!! One of the busiest open house weekends I have seen in awhile. And, still, more homes coming to market. However, I am still seeing deals being made and homes falling out of escrow. Rates play a big part in the process and I have seen those go up and down often this season. I always tell my friends and family: “You won’t know when the housing market has hit bottom until it has passed us.” Don’t settle for Out Dated Advice when making one of the toughest decisions in life.
I am Your Professional Advice Giver When it Comes to Buying & Selling Homes. Mandy’s Happenings in Real Estate
I would combine the Survey Fee and Application fee and round up to about $900 for admin/lender fee. There could be added costs if you choose to impound your taxes & insurance. Lenders require a few months of each to set that account up. I say budget about $8,000-$10,000 in closing costs depending on price of home. There are some great programs that can help with down payment and closing costs. Let me get you in touch with those lenders. With rents as high as they have been, you might be better off Owning…I know you will!!
Wine is my 2nd passion, Real Estate is my 1st:
Came across this great, fun article for tips on wine tasting. One thing I am very passionate about, next to Real Estate, is wine! How can you not love it when we are surrounded by the beauty it has to offer. Most of us are spoiled because we have “views” everywhere we go. I bet you can’t go 1 mile without seeing a winery or vineyard. I’m really fortunate to sell homes because I come across a new winery almost every week. I made it my mission years ago to visit every winery within a 40 mile radius of my home in Windsor. WOW! I had no idea 15 years ago that I would be here now not having even seen 50% of them!! So, every year I make a new goal to visit more wineries…..and every year I am disappointed that I could not achieve the previous goal. I love it!! Guess I have to keep setting the goal higher!! DARN. Anyway, came across this article and it is great, especially for tourists our “out of towners.” I like to switch up my content sometimes and not always talk Real Estate…..but, I can’t. I love it here and you all need to move here….I can help you buy a house or maybe a vacation home!! I tried but Real Estate is my passion. ENJOY~
Avoid being a victim of a home burglary:
Be smart when you are away on vacation. We all want to post where we are and show our fun pictures on social media. My advice is go ahead and do it, IF you have someone staying at your home watching over it. BUT, if you do not have a house sitter then refrain from posting until you are back in route home. I keep automatic timers on most of my lights, alternating when they go off and on throughout the house. Having the post office hold your mail is another great tool to avoid showing obvious signs of you not being home for extended period of time. You may be located in a gated community which does add extra security from intruders. I am, fortunate enough, to live next door to a police officer and a house of military guys. I feel extra safe, but I still take the necessary precautions when staying away from my home for more than 2 days. Auto theft and burglary: That does bring me to another subject….Vehicles. Lock them up and keep valuables out of sight. This goes for loose change and CD’s (do those still exist??). Stay smart and safe my friends!
This graph is pretty accurate, no matter where you are living. What I can tell you is that the list of non-negotiable usually starts out with about 20 items that is a “must have.” As the search goes on I do see the list to shrink. But, the common denominator seems to always include this list. A home is a long term investment and there could be events, in the economy, that could keep you in that home for a lot longer than you had planned. Paint, carpet, fixtures can all be changed to fit your style. But, it is much more expensive to install central heat/AC, expand square footage or create a nice size yard when your lot is not big. I think this is why the process can be emotional. A long term investment, unlike a car. Write a list of Pros and Cons when purchasing can really help you narrow down the Non-Negotiable. https://activerain.com/droplet/5gzY
There are programs out there offering down payment assistance and closing costs assistance. The cash to close seems to be the biggest hurdle….NOT the payment. Therefore don’t rule out Home Ownership. Great article to check out: https://themreport.com/daily-dose/12-11-2018/achieving-homeownership