3 things that can help more first timers enter the housing market

The National Association of Home Builders announced its support for a proposal made by former Secretary of State Hillary Clinton. The proposal aims to increase homeownership, which will greatly improve the real estate industry.

The proposal included an emphasis on homeownership counseling, down payment assistance and working toward providing available credit for qualified borrowers. The NAHB said each of these items will help to improve homeownership rates.

Homeownership counseling
For the first time home buyer, the purchase of a house can be an overwhelmingly new experience. Nothing quite prepares people for this purchase, even if they have bought big or expensive items before, like a car.

Because of this, it can be easy for an inexperienced homeowner to fall behind on mortgage payments, or lose track of the financing. Homeownership counseling is the answer to this problem.

According to the National Association of Realtors, talking with a counselor certified by the U.S. Department of Housing and Urban Development or taking a homeownership education class can greatly improve the experience of a new homeowner.

People who take a homeownership course are more likely to get a better credit score.People who take a pre-purchase homeownership course are more likely to improve their credit score.

Data reported by HUD User showed that, after taking the course, more than one-third of participants improved their credit score by at least 20 points. An additional third stayed within 20 points of their original score. This is crucial because having a good credit score is one of the more important aspects of getting a low cost mortgage.

The data came from a study that followed 573 people taking a pre-purchase homeownership counseling course. After the study was complete, about 35 percent of participants made a home purchase within the 18 months following the completion of the course. Of those approximately 200 home buyers, only three had negative experiences. One had an open home equity loan. Another fell behind on mortgage payments. The last had a major derogatory event on the mortgage. The remaining buyers had no problems staying on top of their homeownership responsibilities.

Down payment assistance
The purchase of a home takes a lot of preparation, both mental and financial. Many people have not saved up enough for a down payment before they are ready to buy a home. This is why down payment assistance programs are so helpful.

DPAs are usually geared toward first time homeowners that have not saved up enough. The programs take into account several things, including the price of the home, the buyer’s income and the property location, among others.

The nation has seen the growth of DPAs over the past few years. According to Down Payment Resource, the fourth quarter of 2015 saw 51 programs added and 761 programs updated.

The South Atlantic region saw the most DPAs, with 591 across the states of Florida, Georgia, South Carolina, North Carolina, Virginia, West Virginia, Maryland and Delaware. Of these, 86 percent have funds available to home buyers. Florida itself has 231 programs.

“California has 409 down payment assistance programs.”

Next is the Pacific region with 515 programs across California (which alone has 409 programs), Washington, Oregon, Alaska and Hawaii.

Many DPAs are offered by a specific city, county or state, but 25 are available nationwide. Prospective home buyers can talk to a qualified mortgage lender to learn about the DPAs available to them.

Credit availability
Since most people can’t buy a house outright, getting a mortgage is one key aspect in making a home purchase. This is why ensuring credit is available to those prospective homeowners is so important in real estate. When more people are approved to a mortgage, more homes are being sold.

According to the Mortgage Bankers Association, the mortgage credit availability index has been on the decline the past few months. February saw an index of 123.8, representing no change from the previous month. January’s score was a 0.4 percent decrease compared to December, when the index was at 124.3. And this score was a downward change of 2.4 percent compared to November.

These consecutive lowering scores indicate that tightening credit requirements may be affecting the housing market. When there are more requirements for a person to get a mortgage, fewer people are able to obtain them, which leads to a decrease in home sales.

However, this doesn’t mean a hopeful home buyer can’t find a mortgage. In fact, there are plenty of programs that can help, such as a no closing cost home loan, which can help with the upfront fees that may hold home buyers back.

For information about loans and programs you are qualified for, talk to the experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind.

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