I have been doing a little comparison shopping for First Time Home Buyers! In todays market the first time home buyer has a lot of options. Knowing which program to choose can be difficult and varies from buyer to buyer. I have done a quick comparison between FHA using City down payment funds, FHA using the NHF grant and The Home Advantage Program. All three are popular in our market place. I used pricing that was available on November 26, 2014 using a $175,000 sales price. FHA 30 year fixed using $10,000 in City down payment funds offers the lowest rate/APR combination at 3.625%/5.749%. The estimated PITI payment is $1,202 and the buyer would need about $1,760 to close NO FUNDS NEEDED FROM THE SELLER. FHA 30 year fixed using 5% in NHF funds has a rate/APR combination of 4.5%/6.521%. The estimated PITI payment is $1,312 and the buyer would need about $5,658. Most buyers do not have this so it is likely that the price would be $180,000 here with the seller paying $5,000. In that case the payment would be about $40 more per month. The Home Advantage Program offers a rate/APR combination of 4.25%/6.324%. The estimated payment here is $1,264 with $5,000 or so for either the buyer or seller to pay. Again, if the seller needs to pay costs - it is likely the sales price would increase. Rates and fees are subject to change and this is in no way an offer to extend credit. What I would like to point out is that your buyers have options. Some are better than others. I know the Home Advantage program is popular because it can accommodate your clients that make upwards of $90,000 per year. Most people who earn that annually would be better off getting a 401K loan (if that is an option) and getting the lower rate that the standard FHA or Conventional programs offer.
Posted on: Mon, 01 Dec 2014 22:36:40 +0000
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