Questions? Feedback? powered by Olark live chat software

Chrisman's Corner: Renting vs. Buying

JMAC’s brokers are always meeting potential clients who are renting and are curious about the cost of living in an apartment versus that of buying and living in a home. And, in many places where JMAC has broker partners, the cost of renting has actually surpassed that of owning a home.

Many renters are beginning to buy again due to new loan programs that make it easier for first-time home buyers to qualify for a mortgage. With the drop in mortgage-insurance premiums, FHA purchase originations increased more than 30,000 a month last year from 2014, translating into more than 250,000 first-time home buyers entering the market.

FHA loans also accounted for 22 percent of all loan originations in December, up from 17 percent a year earlier. The reduction in FHA annual mortgage-insurance premiums last year will save borrowers about $900 a year. Although the rise in FHA loans does bring added risk if there is another housing crash, it’s a great option for first-time home buyers.

Home prices are on the rise, and many borrowers have been seeking government-guaranteed loans with small down payment requirements. FHA loans that are at least 90 days delinquent were up slightly with an increase of just 0.05 percent in fiscal 2015 from a year earlier.  Many lenders have also dropped their minimum credit score for an FHA mortgage to as low as 580 from 640, and JMAC has followed this trend with credit score requirements as low as 580 on qualifying FHA loans.

Some of our brokers tend not to offer FHA loans to clients, or are not familiar enough with the product. Your JMAC Account Executive can certainly help answer these kinds of questions and provide information on other low down payment programs that we offer for first-time home buyers.