FHA Loans - Help for First-Time Buyers

If you have little or no money for a down payment, iffy credit and too many bills, an FHA loan could be what you need to buy a house.

The Federal Housing Administration, a part of the Department of Housing and Urban Development, was created 70 years ago to help first-time buyers, especially low-to-moderate income families and minorities, get the financing they need. 

You can apply for an FHA-backed loan from most banks and mortgage companies.

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Home Builders' Confidence Falls

Home builder confidence fell for the third straight month in May and executives in the battered sector now believe they'll have to wait until next year for even a sluggish recovery to begin.

According to a survey by the National Association of Home Builders, the confidence index sank to 30 in May from 33 in April, matching the September reading that had been a 15-year low at that time.  The subindex measuring builders' view of current market conditions fell to the lowest level since February 1991, while their view of the market six months from now and their perception of buyer demand both dropped to match the 15-year lows hit in late 2006.

The association is now projecting that home sales and housing production will not begin improving untl late this year, and they are expecting the early stages of the subsequent recovery to be sluggish.

Housing Starts Up, Permits Down

U.S. home construction unexpectedly rose in April but permits for future building sank to the lowest pace in nearly a decade according to a government report, pointing to extended troubles in the housing market.

The Commerce Department said housing starts hit a seasonally adjusted annual pace of 1.528 million units, a 2.5 percent increase from the prior month.  However, building permits, which signal future construction plans, dropped in April by 8.9 percent to a pace of 1.429 million units.

Even though housing starts increased in April to the highest pace since December 2006, they were down 16 percent from a year ago and, in a sign the troubled housing market may not be turning the corner as quickly as hoped, building permits were off 28.1 percent from a year ago.

All of this news about how bad the housing market is can actually make it a GREAT time to think about buying a home.  Builders are making more deals than ever to move homes, and it could be the best time in many years to get a great deal on a house.

Contact us to schedule a time to help you decide if now is the right time for you to think about buying real estate.

Mortgages: Lenders Tighten Standards

Mortgage lenders are beginning to scrutinize borrowers more closely, causing some loan applicants, even those with good credit, to face higher costs and more hassles.

As the number of delinquent mortgages climbs, lenders have tightened their standards for issuing loans, including such well-publicized moves as raising minimum credit scores and cutting back on 100% financing and low-documentation loans. Now, some lenders are probing more intently would-be borrowers' finances. They are taking a tougher look at how much the property a borrower wants to buy is worth. They are peering further into clients' pasts for credit problems and requiring more in-depth reviews of borrowers who say they are self-employed.

Mortgage lenders say they are tightening standards in response to pressure from mortgage insurers, investment banks and investors who buy mortgage-backed securities. Spooked by rising delinquencies, Wall Street is now pushing lenders to beef up their underwriting.  Looser standards weren't much of a problem when home prices were climbing. But as the housing market has cooled, more borrowers are winding up in trouble.

Lenders are also delving deeper into borrowers' employment and credit histories.  In recent years lenders would often look back just 12 months at a borrower's mortgage payment history.  Now, many lenders are looking at two years' of mortgage payments and reviewing information on credit card payments and installment loans.

Are you considering a mortgage?  Does news of tougher standards make you think twice about applying?  We'd love to hear your thoughts and comments about this.  Just click the "Comment" link below and tell us what you think.

Housing Market Still Under Pressure

The pace of existing home sales slowed in the first quarter by almost 7 percent compared to a year ago according to the National Association of Realtors.