“FHA loans continue to lead the way as the best option for first time home buyers. The flexibility in the loan underwriting and reduced down payment is attractive – especially to the first time buyer,” said Sean O. McGeehan, Loan Officer
(PRWEB) January 27, 2014
According to a USA Today article published on January 9, 2014, “New mortgage-lending rules take hold Friday [January 10] that federal regulators say will guard against the risky lending practices that fed the housing bubble, which led to the greatest collapse in U.S. home prices since the Great Depression.”
Although the new Qualified Mortgage (QM) changes might not have a huge impact on whether first time home buyers can obtain a mortgage loan, they might have to provide additional proof that they can afford one – a process that could make conventional loans become even more restrictive for most buyers.
Rolled out from the 2010 Dodd Frank legislation, the new QM guidelines focus on the first time home buyer’s ability to repay. It also prevents several risky features that are customary with higher default mortgages.
General Qualified Mortgage Guidelines:
- No risky features that include making the loan term go over 30 years.
- No interest only payments.
- No payments that are less than the amount of principal and interest due each month.
- Cannot have more than 3% of total fees on loans over $100,000.
- DTI’s cannot go over 43% under most circumstances.
It has been determined, however, that FHA loans are exempt from some of the more restrictive new QM guidelines. FHAFirstTimeHomeBuyer.com focuses on helping home buyers obtain financing to purchase their dream home.
“FHA loans continue to lead the way as the best option for first time home buyers. The flexibility in the loan underwriting and reduced down payment is attractive – especially to the first time buyer,” said Sean O. McGeehan, Loan Officer.
First time home buyers should see little to no changes in their options with FHA mortgages, even with the new Federal QM mortgage rules put into effect on Friday January 10th, 2014. The QM Mortgage guidelines have several restrictions on most mortgages, and one of the biggest ones is the 43% Debt to Income restriction. Borrowers who would normally be able to borrow up to a 50% back end debt to income ratio would now be capped at 43%. This could reduce the purchasing power by $50,000-100,000 for some borrowers getting non-FHA Loans.
With FHA Loan’s easier requirements and more desirable terms, first time home buyers will receive several benefits when pursuing a FHA Mortgage loan.
FHA Mortgage Benefits for Home Buyers:
- Allowed To Go Over 43% DTI
- Higher DTI Ratio’s Mean More Purchasing Power
- Only 3.5% Low Down Payment Requirement
- Low Mortgage Rate
- Gift Allowed For Down Payment
- Non-Occupant Co-signer Allowed
About FHA First Time Home Buyer
FHAFirstTimeHomeBuyer.com is here for those seeking an FHA loan. FHA Loans are the most popular mortgage product for first time home buyers. It’s by far the most versatile loan available. It allows for flexible credit, higher qualification amounts and the rates are very low. The department of Housing and Urban Development (HUD) backs FHA and regulates FHA loans. These types of loans are specifically designed with the first time buyer in mind.
Sean O. McGeehan, Loan Officer
14150 S. Bell Road
Homer Glen, IL 60491