HOW HAS HOME OWNERSHIP BECOME MORE ACCESSIBLE?
There are tremendous advantages owning a home compared to renting. Yes, renting does have benefits that owning does not but primarily those benefits are geared toward mobility and having the ability to change addresses whenever you want to. But over time, owning and creating wealth through equity as well as the income tax advantages are just too strong to overcome. But for those who have yet to buy their first home they may be sitting on the sidelines thinking it’s too tough of a task to get approved for a mortgage loan these days. But that’s really not the truth.
Over the past 10 years or so, the mortgage industry has made some giant swings. For a time, almost anyone could get approved for a mortgage as lenders devised some rather creative mortgage programs that allowed those with poor credit, instable income or a lack of a down payment to finance a home. Then, the industry put the brakes on loan approvals and the toxic loans that led to the financial meltdown vanished along with the lenders who made them. It seemed that unless you had 20 percent down and a 750 credit score, you couldn’t get approved. Not so today.
Home ownership has become more accessible as lenders have returned to more traditional lending guidelines that allows for those without 20 percent down and pristine credit to buy and finance a home. FHA loans for example ask for just 3.5% down and that down payment can be in the form of a gift as well. FHA loans are by far the mortgage program of choice for first timers due to the accessibility of the program and the low cost of entry. FHA lending guidelines are less stringent than say a conventional loan with a 5.0% down payment. And of course for those who qualify for a VA loan there really isn’t a better choice for someone wanting to buy with no money down and reduced closing costs.
It’s understandable that potential home buyers shy away from even considering buying a home given what has happened in the past but in today’s mortgage world common sense underwriting and loan programs that have been around for decades rule the mortgage market and getting a home loan today is a much easier process than just a few years ago. It really is easier to buy a home with traditional financing now. All it takes is just a phone call to a lender to find out how.
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