What buyers have concerns when deciding to buy their first home

Home Buyer Concerns When Deciding To Purchase First Home

Gustan Cho Associates are mortgage brokers licensed in 48 states

The housing market is hot with no signs of a cool down. Mortgage rates have been the lowest in the past three years. Housing prices have been increasing year after year since 2014 with no signs of a slow down. Just in 2020, home prices have increased by over 20% nationally. Most homebuyers are buying homes at higher than the list price. This is due to the high demand for homes. There are more buyers than an inventory of homes. It is not uncommon for most homes to have multiple bids. Most homes will be under contract in less than 30 days in the market. The average home will sell over the list price. It is definitely a seller’s market.

HUD and the Federal Housing Finance Agency (FHFA) have been increasing FHA and Conforming Loan Limits for the past three years due to rising home prices. Many renters who have been waiting for home prices to get a correction are now ready to pull the trigger on buying a home. With interest rates dropping, many renters are looking to get qualified for a home loan. However, first-time homebuyers do have many Home Buyer Concerns.

Top Home Buyer Concerns By First Time Homes

One of the top Home Buyer Concerns is rising home prices. A home that was worth $200,000 a few years ago may be worth $250,000. Lack of inventory is driving home prices up throughout the continental U.S. Home prices are reaching an all-time high since the 2008 Real Estate Collapse. Homebuilders are building more and more condos and townhomes in landlocked cities. Competition among homebuyers is another major homebuyer concern.

With mortgage rates being the lowest in three years, there are more first-time homebuyers shopping for homes. Bidding wars and lack of housing inventory is the top home buyer concerns.

Home Buyer Concerns On Down Payment And Closing Costs

The second top home buyer concerns are many buyers are worried about the down payment and closing costs. Most homebuyers do not have to be worried about closing costs. Closing costs can be paid with a seller’s concession and/or lender credit. The down payment required depends on the loan program. However, lenders allow the down payment to be gifted.

Borrowers can borrow against their 401k Retirement Plans for the down payment and/or closing costs on a home purchase without affecting the debt to income ratio calculations.

Down Payment Requirements On Home Loans

Here are the down payment requirements on home purchase:

Gustan Cho Associates offers down payment assistance programs to first-time home buyers.

Other Concerns By First Time Home Buyers

Below are other concerns:

  • How much home can I afford?
  • Can I qualify for a mortgage with bad credit?
  • Rising home prices
  • Lack of inventory and bidding wars
  • Buying older versus newer home
  • Selling my home first
  • Will mortgage rates keep on increasing prior to me buying my home?

If you have any more questions about this article and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.