First time home buyers: The “American Dream” is back!

03 Nov 2017

First time home buyers: The “American Dream” is back!

Home Ownership has been the keystone of the “American Dream” since the inception of our country: a man’s worth was determined by his land. Although valuing oneself on what they own is considered archaic in today’s society, one aspect has remained constant throughout the last 100 years: the American dream is still based around home ownership. The dream has gone through a very tumultuous phase in the last twenty years, being pummeled by the stock market crash of 1998, and then a year later entering into a phase where we had a complete buyers frenzy, which carried on all the way to the housing crisis of 2008.

What changed in that ten-year period? Why did we enter into such a detrimental housing crisis? Well to put it simply, American’s were leveraging their debt to an unsustainable degree. It simply took a downtick in the economy to pop the bubble that our banking system created. It’s taken another ten years, but we, as a country, have learned from our mistakes. The days of no document loans are over, and we, as an American financial system, are ready to create a sustainable debt infrastructure and reopen the gates of the American dream to qualified first time home buyers.  The best instrument to enter into the denizen of home ownership is the FHA loan. An FHA loan is a mortgage insured by the Federal Housing Administration, and they have never looked more lucrative than they do today, especially for a population that has just gone through an extremely rocky twenty-year financial cycle.

The qualifications for an FHA loan are very simple. Before we get into that though, let’s take a look at why the FHA is such a great instrument to enter into home ownership today. Let’s say you want to buy a home, and its value is at $300,000.00. With an FHA loan and a credit score over 580, you would only need to put down a 3.75% down payment on the property! That’s only $11,250 (plus closing costs) to enter into the American Dream! Now, if your credit score is under 580, there is still hope for you! You would simply have to bump your down payment up to ten percent to qualify. It has never been easier for qualified home buyers to cross the bridge into home ownership than it is today, sustainably.

Now, some people would say we are entering another bubble. I don’t see it that way, and here’s why: our countries GDP is sustainably hitting the mark over three percent growth each quarter, something the American economy was unable to do one time in the past eight years, even though we were coming out of a major recession. Our stock market is seeing new highs every day. Our jobs reports are coming back with positive growth each quarter. We are bringing manufacturing back to America and revitalizing our infrastructure nation-wide. We are entering an eight-year period where we may be lucky enough to see true growth year over year. I’ve always been a contrarian, but when everything falls into place, you have to ride the wave and go with the flow. To put it simply: You are losing money by not being involved in real estate today.

If you are not a cash buyer, then the most important step of investing in real estate is the pre-qualification process. You will simply need your last two years tax returns, two years of income statements, and your most recent monthly pay stubs. If you’re self-employed, you will need three years of tax returns and a year-to-date profit/loss statement. Simply call Costa Bella Realty Group today, and we will be happy to walk you through the entire process, professionally.

Michael Spitaleri
Realtor
954 895 0199

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