6 Things First-Time Home Buyers Should Know in 2014
Assistance for first time home buyers in Minnesota is readily available. Here is some important first time home buyer advice and information you should know before you make your purchase.
The U.S. Department of Agriculture (USDA) offers a zero down mortgage option for “rural development.” You may be thinking, “But I don’t want to live on a farm!” but keep in mind that certain areas you wouldn’t think of as “rural” may actually qualify for USDA rural development financing.
Military veterans may use the VA mortgage loan to finance their first home.
The Federal Housing Administration (FHA) has a 203(b) loan which typically has a lower down payment requirement, lower monthly insurance premiums, and lower closing costs than other mortgage loan programs. First time home buyers should look into the FHA loan.
If you’re thinking of buying a foreclosed home, a HomePath Mortgage may be of interest. With a low down payment, no mortgage insurance required, and no appraisal needed, a HomePath mortgage can help you buy a fixer-upper for your first home. Also look into what’s called HomePath Renovation, a loan to help finance the purchase and remodeling of an investment home, lending up to 35% of the as completed value—no more than $35,000.
Got your eye on a home that needs major rehab that will cost more than $35,000? Apply for the full FHA 203k loan, which will help you make necessary structural repairs so you can have a nice first home. A variation on this is the 203k Streamline loan for homes that need minor repairs, up to $35,000.
First time home buyers should talk with a mortgage consultant. They’ll check your credit score and help you see where you’re at financially, and whether or not you’d qualify for a mortgage.
In Minnesota, contact Lake Area Mortgage, a division of Lake Area Bank at 651-209-2900 for help with finding financial assistance, down payment assistance and more. The experienced team at Lake Area Mortgage can answer your first time home buyer questions, and guide you in the right direction to make getting that first home go from dream to reality.
The Homeownership Opportunity Program (HOP) provides short-term, temporary financing for the purchase and rehabilitation of vacant properties in, or in imminent danger of foreclosure, and for properties in a foreclosure impacted area. HOP loans are paid off by standard first mortgage products when the rehabilitation is completed.
To qualify, borrowers must:
Intend to owner-occupy the property;
Meet income limits (total income less than $96,500 – adjusted annually);
Be pre-approved for a standard first mortgage with a loan amount sufficient to pay off the HOP loan when the work is completed.
Cannot be in industry standard mortgage condition, and;
Must be a single family detached, zero-lot-line townhome, owner-occupied duplex, manufactured home on permanent foundation, and be;
– Vacant as a result of foreclosure, or
– In imminent danger of foreclosure with a negotiated short-sale, or
– Located in a foreclosure impacted area
For buyers who do not need or qualify for down payment assistance we have the Minnesota Mortgage program comes with a subsidized interest rate .375% – .625% below market rate for government loans and .25% less for conventional loans. Mortgage daily interest rates can be seen at www.mnhousing.gov
The FHA TOTAL Mortgage Scorecard User Guide states that the loan casefile must be manually downgraded to a Refer recommendation and the loan must be reviewed by a Direct Endorsement (DE) underwriter if the borrower is disputing any credit accounts or public records. As a result, the following new message will be issued on all FHA loan casefiles to remind lenders of this requirement, but the recommendation will not be changed to a Refer due to this message:
If the credit report reveals that the borrower is disputing any credit accounts or public records, the mortgage loan application must be referred to a DE underwriter for review