After the housing bubble burst and many banks nearly went
into bankruptcy the mortgage requirements were very strict and it was very hard
especially for first-time homebuyers to qualify for a loan. At that time the
borrowers had a lot of hoops to jump through and could hardly get a loan.
The first situation was as bad as the second one. However,
both sides – borrower and lender – have learned their lesson. The borrower
knows that he/she has to show a solid financial status before a lender is
willing to lend him/her the necessary money.
On the lender side the mortgage requirements are less
restrictive and for first-time homebuyers the 3% down payment in a real estate
purchase is back again. With such a high mortgage amount the borrower has to
pay insurance premium for the loan amount that exceeds 80% of the purchase
price. During the housing crisis this insurance premium was 1.35% and is now
down to 0.85% and that is a huge advantage for first-time homebuyers.
These new financing options will certainly attract new
buyers who had to struggle in the past with the higher down payment
and qualification requirements.
