When we bought our first home, we made a substantial downpayment. We raided our savings accounts and borrowed from our parents. We sweated as the lender combed our credit reports and turned their noses up at our income, student loan debt, self-employed status and work history. We panicked as the lender demanded a lot more money days before closing. And finally we closed. WE WERE LUCKY.
We were lucky that we had savings. Lucky that we had parents that wanted this home for us as much as we wanted it for ourselves – and had the money to help us. Lucky that we found an affordable home in what turned out to be a great neighborhood.
Some people aren’t that lucky. They may be working hard at their job, or at getting an education. Working hard at cleaning up (or maintaining) their credit. Working hard to achieve their piece of the American Dream – which lately seems out of reach for more people. Some people don’t have luck, high paying jobs, or parents waiting in the wings with a checkbook. But they work and they contribute to our economy and our society. Should they have a chance at their piece of the American Dream? I BELIEVE SO.
That’s why I enjoy my work so much. I get to work with first time homebuyers. I get to help them buy an energy efficient, new construction home. I get to help them get a fair mortgage loan with a fixed interest rate. I get to tell them that their city and their state are waiting in the wings with a checkbook, ready to help them make the downpayment that guarantees a low monthly mortgage payment, and helping to ensure that as they move ahead in life, their home can truly be a foundation for wealth.
So many people don’t know that these options are available to them. There are four non-profit developers working in our current neighborhood alone. We don’t have big marketing budgets, so we take alternate approaches. We visit local employers, homebuyer workshops, community events, churches, schools – anywhere we can find ONE PERSON we can help to become a homeowner. We even hire Realtors to list our homes:).
Government deregulation is getting a lot of heat right now as a cause of the mortgage industry meltdown. BUT DEREGULATION WAS NOT AND IS NOT THE ONLY GAME IN TOWN. The government also funds developers and lenders to build affordable homes and make affordable loans.
TO REAL ESTATE AGENTS - If you are working with first time homebuyers, find out about city and state sponsored second loan programs and community developers in your area. Many people come to us thinking that they have to make more money, save more money, and have a high credit score to purchase a home. Some REAL ESTATE PROFESSIONALS thought the only way to get people without a big income and big savings account into a home was with an exotic mortgage. NOT TRUE!
TO FIRST TIME HOMEBUYERS – If you are looking for your first home, do your research. Find out what is offered by local community and non-profit developers. Find out what types of loans are offered by city and state organizations and local, community banks for first time homebuyers. If your lender can’t tell you about these programs – about whether they are available in your area, and explain why they are or are not a good idea for you, FIND ANOTHER LENDER. Same for your REAL ESTATE AGENT (they should at least be able to point you towards the right person to talk to).
Here in North Carolina, there are lots of organizations that exist to service first time homebuyers, and buyers who want a home that can be financed with an affordable, fixed rate mortgage loan. Here’s a short list:
If you are not in an area served by these organizations, use these as a springboard. Look for similar organizations in your city or state.