First Time Home Buyer Financing Secrets
The first advantage is the low down payment of 3.5%. For example, a $150,000 loan would only need $5,250 for the down payment. These monies could even come in the form of gift from a parent, grandparent, domestic partner or other close family member. In addition, several municipalities such as Orange County and the City of Orlando offer down payment assistance programs. These programs have very specific criteria based mostly on household income and other parameters. This also depends on the program and the location of the home being purchased.
The second advantage is lower credit score requirements for FHA borrowers. There are lenders that allow the minimum down payment (3.5%) with credit scores as low as 580. With a 10% down payment a credit score could be as low as 560 and still qualify for the program. Not to say that someone could qualify for an FHA loan and have a history of never paying anyone on time! Generally speaking, the banks look at your most recent 12 month payment history on your credit report. Most importantly, banks are looking for a perfect rental history in the past 12 months. If you are renting from a private landlord it is important to pay with a check and to keep copies for documentation purposes. Receipts and money order receipts are not acceptable. Plan ahead and don’t forget to pay on time.
The third advantage is the more lenient time frame after a bankruptcy, short sale or foreclosure. It is less when qualifying for a FHA loan then with the traditional conventional loan. A borrower with reestablished credit after a bankruptcy could qualify in as little as two years. Reestablished credit would mean in most instances at least 3 trade lines or credit items paid on time since the bankruptcy. For example, rent, car payment, credit card etc.
In the case of a foreclosure or short sale there is a three year waiting period from the final settlement date, specifically with the lender that was holding the mortgage on the property. In the case where a short sale occurred and all mortgage payments were made on time until the actual short sale, the wait time is reduced to 2 years. This is such an advantage compared to conventional loans where after a 2 year wait period, a 20% down payment would be required.
If you are a first time homebuyer and would like to discuss this further, please call us today. We would love the opportunity to guide you on an wonderful home buying process.
Karen M. Riscinto PA, CDPE
Multi-Million Dollar Producer 2013
Million Dollar Producer 2010-2012
Vangie Berry Signature Realty- Realtor, Branch Office Manager
Florida Lifestyle Property Management, llc - Owner/Property Manager
(Branch Office)
108 E. 3rd Ave
Mount Dora, FL 32757
352-602-7534 Fax
(Vangie Berry Signature Realty Main Office)
2605 # C Kurt Street
Eustis, Florida 32726
352-742-7355 Office
352-602-7534 Fax
For all your "OUT OF THE BOX" Real Estate needs!
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