“Lenders aren’t lending! You’d be surprised.”
February 12, 2016. You hear it all the time from a neighbor or as you read the daily news. “Lender’s aren’t lending!” This can be discouraging to a potential homebuyer or seller thinking about a selling their home. The reality is this statement couldn’t be further from the truth. Lenders are lending, and new products are added all the time to help borrowers purchase homes. Let’s delve into some of the current stigmas out there surrounding home financing.
There are no tax credits for First Time Tome Buyers:
Actually there are. In the State of North Carolina if you are a first time home buyer and don’t exceed certain income limits, you are eligible for a Mortgage Credit Certificate. This certificate allows you to receive up to a $2,000 additional Federal Tax Refund each year for as long as you have the loan. Lenders that are licensed to provide this option, can even use the extra $2,000 as income to qualify you for a higher purchase price!
There are no First Time Home Buyer programs:
This one is way off base. Lenders have an array of products to help first time home buyers purchase houses. The best of these is a USDA loan offering 100% financing. There are also two new programs just released by Fannie Mae and Freddie Mac that offer 97% financing with reduced mortgage insurance. An FHA loan with 3.5% down is also a great program for clients with recent bankruptcies or foreclosures. Did I mention you could also be eligible for a down payment assistance program that can contribute up to a 5% down payment for you and help with closings costs! Only certain lenders who have taken the NC Housing training and passed their requirements can offer these loans. Make sure your Realtor refers you to one of these highly trained lenders.
You need to put 20% down to purchase a second home or vacation property:
Most of my buyers are pleasantly surprised to find out that they can put as little as 10% down and buy a second home/vacation rental property at the beach. We even have programs without mortgage insurance for qualified buyers.
Condo loans require more money down:
While you do get a better rate if you put 25% down on a Condo, that amount is not required. We routinely finance condominiums with as little as 5% down on primary residences and 10% down for second home/vacation rental properties.
As you can see there are many exciting programs out there and this is just scraping the surface of what is available. Lenders are excited to lend, and more so than ever have a full range of loan products to offer. If the statement, “Lenders Aren’t Lending” has been holding you back, don’t let it. Most lenders can tell you right away free of charge what programs you would qualify for. Get a recommendation from a local Realtor and call a local loan officer today to see what they can offer you. You might be surprised!
Posted on February 22, 2016 at 8:57 am by Michael Davenport