First time homeowners and FHA mortgages

By
Real Estate Agent with Edward Surovell Realtors

I have been farming an apartment complex in Ann Arbor with potential first time homeowners for a few months and have found it difficult to convince them that they do not need a 20% down payment.  Our company recently hosted a panel about FHA mortgages which explained how great FHA mortgages can be for first time homebuyers who do not have much savings for a down payment or who have poor credit history. 

I am sure that this generation has learned from their parents that you must put 20% down, and even Suze Orman still recommends the same thing for first time homebuyers.  Many of the residents in my farm are graduate students/recent graduates who have an enormous amount of debt in student loans and they see no reason why they should invest in a house before paying off all of their loans. 

I also worry that the residents think that I am just trying to make money off of them and that I don't care if they get into financial trouble down the line, but I really want them to become aware of the opportunities available in this buyer's market that we are in.  I have directed them to many websites with rent vs. buy calculators and also to NAR's new public awareness campaign at http://www.housingmarketfacts.com/.

Any advice or ideas that you have would be greatly appreciated!

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farming
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fha mortgages
elizabeth martin
ann arbor

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Rainmaker
18,948
TexasHomesDuo Team/Keller Williams- Carol, Darline & Michael
Keller Williams Realty- Boerne Hill Country - Boerne, TX
Realtors

Hey Elizabeth

I have tried this and found that when we offered free educational class on buying homes with no money down we had a great response.

January 22, 2008 01:30 PM #1
Rainer
7,053
Carrie Heath
REMAX Affiliates - Chippewa Falls, WI

Hi;

I do lots of free classes as well with a local lender to present lending options at the class, and have a prepared set of flyers pertaining to different types of homebuyer options that I put together with a local lender.  I also let my buyers know right in my farming materials that I will NOT sell them a property if the financing they get is going to jeopardize their future - and educate them thoroughly on the different types of lenders there are and how to interview the lenders they are considering to get the best info available.  I wrote all of this up with the help of several local lenders, all of whom looked at my info, corrected what needed correcting, and gave it a thumbs up!  Someone is not going to trust you just because you say so, but they will if you show them that you have done the research, the work, and provide the education they need to make the best informed decision!

January 22, 2008 01:37 PM #2
Rainer
38,205
Keith Hoffman
1st Advantage Mortgage - Lombard, IL
1st Advantage Mortgage - Residential Mortgage Specialist
Elizabeth,

I think if you did a frist time buying seminard that is informational, that would help. There are many people that after they see the benfits and the actual dollar savings, it should help. Feel free to look over my website to check out both sections of calculators. Might help. Let me know if you would like me to come out and do one with you.
January 22, 2008 01:38 PM #3
Rainer
5,113
Nick Lateur
Austin, TX

Elizabeth,

I have run into similar issues with first timers.  That link to http://www.housingmarketfacts.com/ is the perfect place to send them.  Buyers are more internet savvy, and there is a lot of false or misleading info out there.  Just keep plugging away at them.  Holding a seminar for first time homebuyers would help as well.

Good Luck!

January 22, 2008 01:44 PM #4
Rainer
40,065
Peter Cannon
Wells Fargo Home Mortgage - New Berlin, WI
NMLSR ID 400610
FHA is a great product. You can finance up to 97% of the purchase price with reduced monthly mortgage insurance rates. Once on an FHA it is easier to refinance and with less paperwork if rates come down and it makes sense to lower the rate and payment. You just have to stay after it.
January 22, 2008 04:36 PM #5
Rainer
10,130
Stephen C. Olczak
Mortgage Help - Fort Myers, FL

As a Loan Officer in a difficult SW FL market...I am discovering the wonders of FHA!  Sure you need full documentation, but underwriters are very reasonable when it comes to explanations to real world credit difficulties.

The deals I have closed have proven to be a financial catharsis for the buyers!  They have had to face and overcome some difficult tasks to get through the process, and truly come out the other end in better shape than they went in.

Erroneous credit items have been removed, they now have their dream of home ownership, and they are much more aware of the benefits of carefully managing their resources.

January 23, 2008 04:17 PM #6
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Rainer
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Elizabeth Martin-Ann

Arbor, Michigan Realtor, ABR
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