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First time Home Buyers Mortgage Program

Charles D'Alessandro of Fillmore Real Estate interviews a mortgage professional. The question is what does a first time home buyer do to ...

The Fed just made life even worse for home buyers

As the busy spring selling season comes to a close, some Americans see their dream of homeownership under siege on three fronts.

The housing supply is low. Interest rates are rising. And even Canada plays a foil: Tariffs on lumber have sent the price of construction sharply higher.

Those hit the hardest? People who are trying to buy their first homes, just as they are amassing the savings to make the leap to homeownership.

Buyers are facing a competitive market in which they need to move quickly, bid high and make other concessions if they want to land the deal, real estate agents say. And for every month that buyers strike out, the combination of rising home prices and higher mortgage rates can add hundreds or thousands of dollars to the cost of the home.

Andrew Stubblebine, 29, decided to get serious about his home search this spring after seeing that mortgage rates were rising and that home prices in Seattle climbed by more than 14 percent over the past year.

5 types of mortgage loans for homebuyers

Generally, lenders require you to pay private mortgage insurance on many conventional loans when you put down less than 20 percent of the home’s purchase price.

Pros of conventional mortgages Can be used for a primary home, second home or investment property. Overall borrowing costs tend to be lower than other types of mortgages, even if interest rates are slightly higher. You can ask your lender to cancel PMI once you’ve gained 20 percent equity. You can pay as little as 3 percent down for loans backed by Fannie Mae or Freddie Mac. Cons of conventional mortgages Minimum FICO score of 620 or higher is required. You must have a debt-to-income ratio of 45 to 50 percent. Likely must pay PMI if your down payment is less than 20 percent of the sales price. Significant documentation required to verify income, assets, down payment and employment. Who should get one?

Conventional loans are ideal for borrowers with strong credit, a stable income and employment history, and a down payment of at least 3 percent.

What are the best first time homebuyers mortgage programs today??

Lots of programs designed to assist with the goal of a home purchase.

Try a local mortgage broker, shop online such as Washington Mutual, Countrywide and make some comparisons.