As a buyer, you know the market is advantageous for you right now. You know there are deals out there. But you also know that the mortgage industry has gone through some major changes. The question is, how have your options changed as a first-time homebuyer? Can you still get 100% financing, and would you want to?

In a nutshell, the changes in the mortgage industry did do away with many opportunities for 100% financing. The city grant programs that helped first-time homebuyers with downpayment and closing costs are no longer available, and stricter financing laws have made it more difficult to qualify. However, never underestimate the motivation of industry leaders to come up with something to keep the buyers in the marketplace.

Today, most lenders require 3% down, especially if you’re doing a conventional loan. However, there is one program available through FHA (Federal Housing Administration) that, in a sense, still allows you to come in with next to nothing. The program is called Nehemiah, and basically it allows the seller to pay up to 6% to finance a 3% downpayment and 3% toward your closing costs. There are a few tricky things about it; FHA has stricter requirements than a conventional loan (and more paperwork!) and you will probably have to negotiate the price lower on the house you buy in order to get the sellers to cover this many costs, but it is an excellent option if you don’t have a lot of cash available.

To see if the Nehemiah program may be right for you, I recommend contacting Josh Hennesy of Prime Mortgage, or another trusted lender in your area.

-Rachel Damiani

Yeah, there are a LOT of these out there right now. Buying a foreclosure can be a great way to get into a home that normally would have cost more on the open market. I have seen incredible price reductions on these properties.

For example, lately I’ve been up in the northern suburbs (Blaine, Lino Lakes) with a first-time homebuyer client looking for a townhome. Many of the townhomes we’ve seen were bought at the height of the market several years back. Many townhomes in this area were bought in the $180’s. When the homeowner went to sell starting last year, they tried to list for around that same price. Unfortunately, times have changed, and after a series of price reductions the homeowner has to go into foreclosure in order to sell. And guess where those same properties are listed now? They are listed in the $140’s!

So guys, when I say it’s a good time to buy, I mean it! The down side is, buying foreclosures is not all great. For one, when you offer on a townhome, you are dealing not with the homeowner (an individual), but with the bank (an institution) and that comes with a lot of red tape. To my surprise, it can take weeks, even months, for a bank to respond to a buyer’s offer. And in that time, additional offers come in (so now all of sudden you’ve got competition). And also in that time, your life keeps moving and maybe you get tired of waiting and decide to look elsewhere.

Although foreclosures are not super fun to deal with, they often provide some of the best deals. Many of these properties are listed right on the MLS, so you can find them through any MLS search. As a Realtor, I can help you navigate buying a foreclosure to make it as smooth as possible. I would love to help you!

-Rachel Damiani

I’m sure you’ve all heard things about the real estate and financial markets in the news. Huge companies are going under, we might be in for a recession, individual and government debt levels are at an all time high, etc. Sounds pretty grim, doesn’t it?

Well, it’s true that things have changed a lot in the past year, and are still changing all the time in the real estate business. In addition to there being many people in distress and having to foreclose on their homes, lending laws have tightened up and loan underwriting requirements have become stricter. Financing options for a first time homebuyer are constantly changing, as some programs that allowed buyers to leverage more are no longer available, and new ones keep being created. Interest rates have been staying low (below 6.5%), but that said, they are still bouncing around a lot.

What should you be doing as a potential buyer during a market that is changing so rapidly? The best thing you can be doing as a potential buyer is to get connected with professionals who are staying current on all these changes. This is especially important as a first-time homebuyer because many of the lending law changes directly affect you. I will always continue to keep you posted through UrbanElement, but to see how changes in the market might personally impact your desire or ability to buy a home, I invite you to meet with me. There are so many great deals out there, it is absolutely a great time to look into buying a home right now!

-Rachel Damiani

In 3 words: Deals, deals, deals!

One of the things I think is so ironic about being in a market slowdown is how nervous buyers get about committing to making a purchase. They hear the horror stories about foreclosures and think they better wait to buy. It’s ironic because it’s precisely during this time when a buyer is in a position to find the best deals.

Do you know what sellers are going through right now? They are desperate. They are scared. They will do what it takes to sell. And, they are offering all kinds of perks to buyers. Like their TV? Or maybe their cool lamp? Heck, unless it’s got serious sentimental value, most sellers are willing to throw it in the deal.

Basically, a recession to you means you’re going to naturally feel more cautious. Fear is in the air, and you can smell it. But if you want to be the person who buys low and sells high, you’ve got to go against the herd. Now, is there a chance the market will get worse? Of course. That’s why I encourage my clients to have a plan. Work out the scenarios so you can feel confident that whatever happens, you are prepared. But seriously, there are so many great deals out there, so get out there and start looking!!!

Happy house hunting,

Rachel Damiani

As soon as I started working with first-time homebuyers, I was meeting the coolest people and I always wanted to find a way to get them all together. Most of my clients are fun, young professionals who are looking to meet new friends and significant others. So I decided to start the Saturday Night dinners, a dinner group where young professionals can gather at each others’ homes, meet new people, and enjoy home-cooked food. More than a year later, the dinners are still going strong - and I am consistently surprised at how warm and wonderful the people are who attend the dinners.

We’d love for you to join us for one - our next dinner will feature gourmet Japanese food! To learn more, go to the Saturday Night Dinners website through Meetup.com!

-Rachel Damiani