MarketWatch has published a story that details the conundrum new first-time home buyers are facing in today's market. In "First-time home buyers struggle to find down-payment money," staff writer Amy Hoak tells about a middle-class family that bought a house a couple of years ago without having to put any money down. This same family, admittedly, would have trouble finding a loan today to finance their purchase.
Typically, when mortgage lending is restricted, it affects first-time owners the most because they frequently lack the funds for a down payment. According to the MarketWatch article, 45% of first-time home buyers opted for 100% financing between July 2006 and June 2007.
Experts are predicting that lenders are going to require more and more down before they're willing to lend to home buyers. To counteract stricter lending practices, check out loans backed by the Federal Housing Administration (FHA). According to MarketWatch, statistics confirm the recent popularity of these loans: The FHA backed 17,773 purchase loans in December 2006; that increased to 24,817 purchase loans in December 2007.
Down payments for these types of loans are around 3% and there are even down-payment-assistance programs to help to this end.
With market prices catering, buying a home in certain localities may prove a good move.
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
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Reader Comments (Page 1 of 1)
3-10-2008 @ 9:56AM
Jimmy said...
mortgage lending is right where it is supposed to be. either write new loans to FNMA or FMAC guidelines, or prepare to hold the paper. When Wall Street created artificial liquidity for subprimes loans, it opened the floodgates to unqualified borrowers. now that that secondary market is all but gone we are back to normal.
and what it normal?
20% down payment
good credit rating
steady income
exactly how its supposed to be.
3-15-2008 @ 2:42AM
Adam said...
Things changing now a days specially looking at the increasing no. of defaulters now a days mortgage lenders don't wanna take risk anymore. I guess it's quite right actually if you plan to buy a property you have to make the first move.
Adam
http://www.perfectmortgagelender.com/