Whatever method you decide is right for you, the time for buying a house is NOW! Over the years, I’ve shared many ways that homeowners and investors can use to realize the American dream of homeownership. A few of the ways I’ve shared for buying a house include:
- Rent to own
- Buying a house subject to existing financing
- Lease options
- Sandwich lease options
- And many other options
The point right now is that mortgage rates have surprised many market observers that expected them to start heading up during the busy summer buying season but they have remained relatively stable. But the fact remains that mortgage rates only have one direction to go and that is up. And there are other reasons for buying a house today for yourself or as an investment.
Buying a House is Getting Easier
With that said, the best news is that lenders are beginning to loosen the qualifications that borrowers must meet when buying a house. The requirements haven’t retreated to when all you needed to do was fog a mirror but they have become easier to meet.
Although the FHA doesn’t actually make loans, they do set the standards for guaranteeing loans that most lenders follow. A short time ago, the FHA lowered the credit score requirement from 640 down to 600. Other requirements have changed as well. The FHA required down payment is now at 3.5%. Additionally, the FHA is also allowing loans to be made in as little time as 12 months after a short sale, foreclosure, or bankruptcy, (with extenuating circumstances such as a job lose or medical cause).
Lenders Move Away From Federal Standards So More People Qualify for Buying a House
Earlier this year, the U.S. Consumer Financial Protection Bureau issued revised the “Qualified Mortgage Standards” for buying a house as a result of changes made to the Truth in Lending Act. It has taken lenders some time to understand what these new rules mean to the industry. The initial response was to over-tighten requirements to be sure that the new rules weren’t being violated when making loans for buying a house.
Today, some lenders have gone in the opposite direction. Some lenders are now making loans for buying a house that don’t meet the qualified mortgage standards. Qualified loan standards only need to be met for loans involving the GSE, FHA, VA, and USDA.
Not many, but some lenders are also seeing business opportunities making loans for buying a house to reliable lenders that otherwise wouldn’t qualify under the new standards. Of course, you can expect the interest rate on these loans to be higher. That’s where the lenders are seeing a better business opportunity.
Other Government Changes for Buying a House
The FHA is making other changes so it’s easier for people buying a house. The HAWK program (Homeowners Armed With Knowledge) has been announced and is expected to roll out later this fall. What is known now is that borrowers willing to take “homeownership counseling” will receive loan fee discounts that can be worth thousands in both lowered closing costs and mortgage insurance premiums. Buying a house worth $200,000 will result in a closing cost savings of about $1,000. Mortgage insurance premiums will be lowered from 1.35% annually to 1.25%, a monthly savings of about $17.
What this all means is that mortgages are becoming a little easier to qualify for. As long as interest rates don’t begin rising, buying a house will be within reach of more people.
If you want to work directly with me on the buying a house or investment business model or any of the other investing models that have proven highly profitable, please join me at www.wendypatton.com/what-is-wendy-pattons-inner-circle.
Besides reading this article about buying a house or investment, you’ll want to read this other useful information that I offer free. Please take advantage of it today.
Several times each week, I make the most current real estate investing information available to readers. This time, it’s about the buying a house or investment business model but the information I provide changes constantly to stay current with the market. Be sure to check back at: www.wendypatton.com. Also, get started learning how to do NO CASH lease options on real estate by picking up a copy of my bestseller book: Investing in Real Estate with Lease Options and Subject-to Deals.
By Wendy Patton
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