When folks wondered a few years ago what they needed to buy a house, the answer was usually perfect credit and a down payment. As credit standards have started to loosen while competition dies down, buyers have more opportunities now than in the past.

Below is a list of the top 5 ways it is easier for first time buyers.  It’s time to get excited!

Lower Down Payments

Because of demand, lenders are more willing to agree to single-digit down payments. Recently Fannie Mae and Freddie Mac publicized a new lending option for first-time home buyers that allows them to put down as little as 3%!  Regardless, if you have the money, put down more—it’s always safer to not be so highly leveraged.

Credit Standards are Loosening

Lenders are loosening standards to boost home purchases. Some lenders are lowering their credit score requirements for FHA loans by as much as 60 points, and about one third of closed loans were given to borrowers with a FICO score below 700. Rates are expected to go up soon, so it might be a good idea to lock in a rate now.


Don’t Cave To Seller Pressure

In the San Diego market sellers are increasingly motivated because of their equity and the amount they stand to net.  It also means more buyers will come out in late spring, so start looking now!  More homes are expected to come on the market this year so it should create a less frantic environment for buyers.  Be sure to be realistic: if you like the house and neighborhood, don’t be afraid to make an offer, but pay close attention to comps and advice from your realtor so you don’t lose out on a great opportunity.

You Can Compete With All-Cash Buyers

By Q1 all-cash transactions reached a record high – nationally almost 42% of all residential sales.  But by late summer the number of all-cash deals had fallen to less than 38% of home sales.  Sellers want all-cash arrangements because they assume it’s quick and clean – even if you aren’t paying cash, you must be prepared and have all of your paperwork together ahead of time—opting to go the full-blown pre-approved, not just pre-qualified, route. And make your lender do a verification of your loan, so all you need to get is a copy of the title report.  I have a great lender if you need a referral.


Love Your Home and the Investment

I always tell clients to have an exit strategy – talk and think about where you want to be in 5-7 with your career and family.  When it comes to a home purchase plan to plant roots and make memories for the next 5-7 years. The market will increase in value, and while your investment will grow, so will your pride of ownership.  And always consider my step-up strategy, where you purchase what you can now, live there 5-7 years, then sell and use that gained equity to buy a bigger home that is closer to your dream home.

Reach out if I can help in any way!

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