A recent study by the National Association of Realtors shows that first time homebuyers currently make up 32% of all home buyers. Compare this number to the historical average of 40%, this is the lowest percent since 1987.

Conversely, a survey by housing giant Fannie Mae found the majority of millennials consider owning a home more sensible then renting for financial and lifestyle reasons. Many young renters appear ready to buy and almost half of those surveyed said their next move will be to purchase a home.

So, where are these first-time homebuyers and what is holding this group back from buying a home?

The Fannie Mae survey gives the most popular reasons in order:

  1. Insufficient credit score/ history
  2. Affording down payment and closing costs
  3. Insufficient Income
  4. Too much debt

Let’s examine these major hurdles perceived by potential homebuyers and real strategies used by mortgage professionals every day to overcome these issues:

Insufficient Credit Scores / History

Most first time home buyers use FHA to finance their home, FHA is lenient on credit requirements and will allow credit scores below 600. A score of 620 or higher is more advantageous for a stronger approval and many of the first-time home buyer programs will require a 640-middle score for down payment assistance. There are also programs that will allow for home financing after significant events like bankruptcy, short sales and foreclosures, just expect to have larger down payment requirements and a higher interest rate.

Affording Down payment and Closing Costs

The HHF program (Florida Hardest Hit Program) provides up to $15,ooo in down payment and closing cost assistance for first time homebuyers in the Tampa Bay area, this amount will usually cover most if not all the expenses for first time home buyers. FHA currently requires a minimum of 3.5% down, VA loans have no down payment requirements.

Insufficient Income / Too much Debt

With the rent payments steadily rising in our area it is often more affordable to buy a home with today’s low interest rates and lock in your payment for the long term. Many programs will allow non-occupying co-borrowers for those whose debt to income ratios are too high.

For more information on any of the programs in this article please contact

Brian McMahon, Mortgage Loan Originator – Team, NMLS #327382

HomeBridge Financial Services, Inc.

5260 State Road 64 East

Bradenton, FL 34208

o: (941) 782-2092, Ext. 427  c: (941) 720-2573  f: (866) 215-2916

e: bmcmahon@homebridge.com

web: www.HomeBridge.com/BrianMcMahon

 

Related Articles

"Rainy days seem to wind up sunny, long as you got a little spending money." Jimmy Buffett. Retail Sales were on the damp side in August, rising at their smallest level since February. Retail Sales disappointed in August, up just 0.1 percent from July. However, July's figure was revised higher…
Read More

"There's no thrill like throwing a touchdown pass." Joe Montana. The labor sector scored in August with solid numbers on job and wage growth. U.S. employers hired 201,000 new workers in August, above the 187,000 expected, the Bureau of Labor Statistics reported. However, June and July were revised lower by…
Read More

Wi-Fi can be slow for many reasons. Here are some tips for checking your Wi-Fi device or placing it properly to ensure the best signal. Restart your router occasionally. Much like rebooting a mobile device, routers need to be refreshed too. Ask your service provider to evaluate your home signal level. SpeedTest can…
Read More

Happy Labor Day Aug 29 2018

Did you know? The first “labor day” assembly in America was held September 5, 1882, when roughly 10,000 working people marched in New York City to urge labor law reforms. Labor Day became a national holiday in 1894. Nearly 50% of Americans work remotely at least some of the time.…
Read More