Posts Tagged ‘first time home buyer’

Determining a homes value is not always as easy as it seems.  While your real estate agent and ultimately, a real estate appraiser will determine the true value of the house you are buying, it’s a good idea for the first time home buyer to have some basic understanding of how home valuation works.

Your Real Estate Agent should be able to give you sales in the areas you are interested in. In addition to sales you should be looking at active sales. Your Real Estate Agent can supply you with active sales in addition there are several websites that show sales for the area.  You can also access MLS listings in your area on line through a number of free real estate websites

Please Note:

Comparing sales and active listings to homes you are interested in you need to make sure you understand what is comparable. What meets FNMA guidelines in comparing properties.

If homes in your area have basements, make sure you compare the living space (above grade finished square feet) to living space and basement (below grade finished square feet) to basement. Other words you can’t consider rooms and finished square feet in the basement and compare them to rooms and finished square feet in the living space. They must be separated and compared accordingly.

FNMA requirements for split foyers/split levels state that the “lower level”, regardless of its percentage of finish or percentage of area above grade, unless it is 100% above grade, be considered as “finished basement” and only the area fully above grade be considered finished living area.

When dealing with finished expansion areas you need to consider ease of entry and to make sure the ceiling height meets local codes and/or FNMA guidelines. Also the area must be finished similar to the main level. (Check local codes)

When dealing with bedrooms – the bedroom must have a closet and it needs to be separate from other rooms by closing a door or doors. It can’t be a room that is used to get to another room or bedroom, etc.

These are some of the most common misconceptions about homes. These and other factors affect value of the home.

Other factors that need to be considered and may or may not affect value. Scenic views, corner lots, busy streets, function utility, etc.

If you need more help on these matters please leave a comment or email us at


A recent survey by the NAR (National Association of Realtors) listed some facts about first time home buyers.  Check it out and see if you fit the profile.  The median age for a first time home buyer was 30 and their median income was $60,000.  The average price for first time home buyer homes was $165,000 and they planned to live in the house for 10 years.  As you probably know,  home values have been going down in most markets which is great news for first time home buyers. The median down payment doubled from the year before to 4% down as no down payment mortgages have pretty much dissappeared.  Follow this link for more cool first time home buyer stats

It kind of looks like the whole worlds economy is going down the tube lately.  How did this happen?  Where did we go wrong?  Who is to blame? Yada, yada, yada.  I hate to break it to you but the world economy is on the brink of collapsing because of the US housing market.  It’s true! You see for the past 5 years or so, as a result of easy money and complete disregard for credit risk, home prices have been going up at an alarming rate.  Yes alarming but nobody bothered to sound the alarm or warn anybody because we were all to busy making money, and in the case of the home owner, spending money like there was no end in site.  All a home owner had to do was refinance every two to three years with cash out to wipe out their high interest credit cards and pick up a couple of hundred dollars a month in cash flow.  I can’t imagine what people were telling themselves as they met their trusted mortgage officer for the third time in 5 years to do it again.

Here is the bottom line if you are a first time home buyer today.  Don’t ever use your home as a bank, save for a down payment, protect your credit score like you would your own new born baby, and never go over 90% loan to value on a refi.  Owning your first home is great but it’s not worth it if you are house poor as a result.  I hope the home buyers and home owners of the future learn from the home owners of the past and don’t end up building another house of cards.

If you are going to be a First Time home buyer anytime in the next four years, you’ll want to get out and vote tomorrow, Tuesday November 4th. If you’re not sure where to go to vote, follow this link to Google’s “where do I vote?” page and simply type in your current address. Your voting location will pop up in a second with directions if you need them.

I’m sure you have heard more than enough about the pending government bailout of Wall Street and all the bad mortgage debt that they own.  If you ask me, I say Wall Street needs to go down with the ship.  It was their greed and the games they played with a thing called derivatives that had as much to do with the mortgage meltdown as anything else.  That said, how will this affect the first time home buyer?

Bottom line is it will be way tougher to get a loan than any of your friends that bought a house 12 months ago.  Lenders, what few that are left, are being more and more picky about who gets a mortgage.  12 months ago someone with a 640 credit score and a low debt ratio would have qualified for as good a rate as almost anyone else.  Today a 640 score will cost the borrower severely in terms of a higher rate, almost a full 1% higher.  This means that today, looking at just one lenders rate sheet, if you have a credit score of 740, you would get a 30 year fixed rate of 6.0%.  If your score is 740, your rate would be more like 7.0%,  which makes a big difference in payment.  These new guidelines are from Fanni Mae and Freddie Mac, who I’m sure you have heard of in the news.  These are the two government regulated organization that made a market for mortgages.  These are also the two companies that recently were taken over by our government, which means you and I are part owners, because they were about to go bankrupt because of all the bad mortgage debt they had on their books.

We are in for some difficult times in the near future but it won’t last forever and if you are a first time home buyer with a high credit score and low debt, you will always be able to buy a home.  To find homes for sale, real estate and mls listings, visit

If you haven’t heard, the seller funded down payment assistance programs like Nehemiah will no longer be available after October 1st.  Many lenders have already stopped offering these programs.  If you are a first time home buyer and you have no money for a down payment, you better find and buy a home fast!

To see millions of homes for sale and mls listings all over the US, visit, a national directory of mls listings with free access for consumers.

The answer is generally no, in fact it is still possible to buy a home with no down payment. That said, not everybody will qualify for this mortgage program so I will mention a few things to consider if you are planning to buy a home with no down payment.

There are very few if any 100% purchase programs remaining in the mortgage markets today. Not long ago home buyers could get either one mortgage for 100% of the purchase price or combine a first mortgage for 80% of the value and a second mortgage for the other 20% of the purchase price. A lot has changed over the past 12 months as I’m sure you have heard and it is difficult to turn on your TV or surf the Internet without seeing something about the current mortgage crisis. So how does a first time home buyer purchase a home with no money down today? With a combination of an FHA mortgage and a 3% down payment made by the seller through one of many down payment assistance organizations.

FHA mortgages are readily available throughout the country and any one of our First Time Home Buyer Consultants can advise you on how to apply for an FHA mortgage in your area. The trick is to find someone who fully understands how the down payment assistance programs (DPA) work and has experience putting them together. The best results for this FHA mortgage combined with down payment assistance from the seller come from working with both a mortgage professional and a Realtor who both have experience with FHA and DPA programs. The easiest way to find experienced professionals is to call our home buyer hotline, or fill out our pre-approval form on  and a local qualified first time home buyer consultant will follow up with you. The other option is to start calling and interviewing Realtors and mortgage companies in the local yellow pages until you find someone who appears to know what they are talking about.

The bottom line is qualified buyers can still buy a home with no down payment and in my next post, I will talk more about the down payment assistance programs, specifically the Nehemiah program.