Realtor.com predicts we are going to see a surge in first time homebuyers in 2015. First time buyers need a little more guidance than experienced buyers do and it helps if you have HUD settlement statement software like Easy HUD to ease the closing process.
The stricter lending requirements that came out of the great real estate crisis in this country have discouraged new buyers from the dream of home ownership. Realtor.com points to two upcoming changes that will make buying a house more attractive: mortgage qualifications and low down payments.
New Qualification Guidelines – The reforms that were enacted to protect homebuyers as a result of the mortgage crisis might have looked good to a politician but they were confusing to buyers and lenders alike. Banks were concerned that Fannie Mae or Freddie Mac could reject a mortgage years after the fact, leaving the lender in the hot seat, so it has been hard to secure a loan without stellar credit. Realtor.com points to one study that shows lenders were routinely denying loans to applicants with credit scores more than a hundred points higher than the minimums defined by Fannie Mae and Freddie Mac. Both organizations released new standards in December that clarify what is necessary to qualify for a mortgage, and that should make lenders breath a little easier.
Low Down Payments – Long ago homebuyers needed a 20% down payment to buy a house, but that changed. One of the reasons cited for the mortgage crisis was the plethora of low or no down payment loans, so lenders started insisting on more money up front than they used to. This has proven to be a significant barrier to buyers who don’t have a previous home to sell, so we are going to see the return of carefully crafted low down payment mortgages. Fannie Mae and Freddy Mac will be offering guarantees that allow private lenders to offer mortgages with down payments as low as 3% for first time buyers.
With this expected rise in buyers new to the housing market, real estate professionals can expect a lot of questions. The HUD-1 settlement statement can be confusing even to experienced professionals, so imagine what it is like to someone who’s never seen one before. The advantage of using Easy HUD is you can complete the form more quickly, giving you more time to take the client through it and explain charges in detail.
Find out how real estate settlement software simplifies your real estate practice and speeds up closing — download a demo and take the software for a test drive.