first-time-homebuyers

Thinking about buying your first house? 2015 might be the year you finally turn your goal of homeownership into a reality. Here are the trends that will shift the real estate industry in favor of first-time homebuyers this year:

A brief history lesson

Following the housing market collapse of 2008, the pendulum of financial reform swung too far, restricting hundreds of thousands of qualified buyers from entering the housing market. The strict lending policies adopted during this period of financial reform made it challenging for first-time homebuyers (Millenials in particular) to meet the lofty lending guidelines required to buy a home.

However, 2015 is poised to bring positive change and may very well be the year Millenials make their move into the market. Various housing and real estate authorities have started scaling back on stringent policies in exchange for flexible policies that will further stimulate the housing market and enable first-time homebuyers to enter with ease.

  1. Mortgage loans will be easier to obtain. The adoption of relaxed lending requirements will enable hundreds of thousands of qualified homebuyers to obtain the funding they need to buy a house. If you’re serious about buying a home in 2015, use this helpful guide to start gathering the financial documents needed to apply for a mortgage. By preparing ahead of time, you’ll enjoy a speedy mortgage application process and a smooth closing.
  1. Low down payments are back. Low down payment programs are also making a comeback in 2015. Earlier this month, Fannie Mae and Freddie Mac announced a new conventional loan program that will allow homebuyers to put down as little as 3%. With a smaller upfront investment required on behalf of the buyer, housing is made more affordable. Whether you have a down payment fund or need to start saving, use these tips to give your savings account a boost.
  1. FHA loans become more attractive. In recent years, the government raised the mortgage insurance premium for FHA loans, increasing the cost of homeownership for many potential buyers. In recognition of this fact, the government has decided to reduce the mortgage insurance premium by 0.5%. This reduction will make it easier for buyers to qualify for a mortgage and enable former buyers who purchased homes on an FHA mortgage to refinance into a lower cost loan. Furthermore, the 2014 maximum FHA mortgage limit of $271,050 will remain in effect for several Michigan counties, including Kent, Oakland, Macomb, Washtenaw and Wayne County. This means that buyers applying for FHA financing can get more house for their budget. Click here to view the maximum FHA loan limits for single-family homes in other counties.
  1. Mortgage rates remain near historic lows. While mortgage rates are expected to rise in 2015, interest rates continue to hover near historic lows. Although we can’t anticipate exactly when mortgage rates will increase, the Federal Reserve indicated that substantial rate hikes will not take effect later this year. To get the best possible rate on your mortgage, follow these tips!
  1. Regulatory changes shorten application processing times. A new document is being developed that will combine the Truth in Lending and Real Estate Settlement Procedures Act into a new integrated document referred to as “TRID.” Set to take effect in August 2015, the Consumer Financial Protection Bureau (CFPB) will require lenders to provide this documentation to buyers three days prior to closing. As experts in the field Ross Mortgage loan officers and lending teams are well-prepared to meet this new requirement to ensure the timely closing of consumers’ loans in accordance with our promise to deliver the loan on the day, the time and the price we guarantee.

Thinking about buying a home in 2015? We’d be happy to help you discuss your options as it pertains to mortgage financing. Start your home search confidently! Send us a message to review your options.  

As your trusted mortgage provider, we are happy to answer any questions you have about these new regulatory changes and look forward to working closely with you for all of your home financing needs.

tross

Tim Ross is CEO of Ross Mortgage Corporation and a lifelong mortgage lender. He has served as president of the Mortgage Bankers Association of Michigan and two terms as a governor on the Residential Board of Governors with the Mortgage Bankers Association of America. Today, Tim is an active participant, charter member and past director of America's Mortgage Cooperative and recently served as the Chairman of the Mortgage Industry Advisory Board for the State of Michigan. Outside of work, Tim enjoys running, golfing and participating in triathlons.

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