Miami Home loan, and Element Funding, direct lending mortgage bank,added anothermoney saving program to their offering. The 203K renovation loan gives a homebuyer, a way to buy a home needing repairs and make the repairs to the buyers specifications.. Jim Carter, loan officer, reports on the details about millennials using this program for their first home.
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A recent study found that 35 percent of millennial buyers are choosing FHA loans to finance their homes. By comparison, FHA typically serves only 21 percent of the overall market.
What is driving millennial’s toward FHA, you ask? Today’s generation of first- time home buyers graduated college in the middle of the great recession and are still feeling the impact of a slow recovery. For those looking to renovate, FHA’s 203(k) loan program offers flexible terms that make home ownership and renovation possible.
Flexible Debt-to-Income Ratio
A recent study by the National Center for Education Statistics (NCES) found that 60 percent of college educated millennials graduated with an average of $30,000 of student loan debt. Their existing debt makes it much harder for them to buy and renovate their first homes than it was for their parents. FHA makes it possible for a millennial person to buy and renovate because they have more generous standards for Debit-to-Income ratios.
The Debit-to-Income ratio, or DTI, is what lenders use to measure how much debt the borrower is responsible for compared to their income. Essentially, this number tells the lender if you can afford to take on additional debt. FHA loans typically allow you to take on slightly more debt than conventional loans. In July 2017, the average FHA borrower’s existing debt represented 28% of their income. In contrast, conventional borrower’s debt was equal to only 25% of their income.
Low Down Payment
Many millennial buyers are burdened by so much debt it has been hard for them to save for a down payment. Saving for the traditional 20 percent down payment is simply out of reach, even for millennials with high-paying jobs. FHA loans only require a 3.5 percent down payment.
Lower Credit Score Thresholds
FHA does not publish minimum credit score requirements but borrowers with less-than perfect credit can typically be approved for FHA loans easier than for conventional loans. For example, the average credit score for a FHA loan closed in July 2017 was 683 compared to 753 for conventional mortgage loans according to a study by Ellie Mae. FHA is often a better option for millennials who may have struggled to find employment after college or who have otherwise struggled to keep their credit score up.
The 203(k) program is specifically for borrowers that are looking to renovate the property. For many millennials, home ownership is only possible by buying a cheaper house in need of repair and renovating it. The 203(k) program allows for a portion of the loan proceeds to be placed into an escrow account and released as renovations are completed. For more about the Element Funding 203K loan program go to http://miamihomeloan4u.com/203k-renovation-loan/.
Element Funding and PRMI Renovation Loans offers FHA and conventional financing options for home owners on any budget. Learn more about your program options and call Jim Carter today at 305-525-6742 for more info.
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So, if you or, anyone you know, is looking to find a Miami-Home-Loan, or a 203K Renovation Loan, to purchase their own first-time home, or to refinance an existing property, and would like help in getting their best financing solution, call me, Jim Carter at Element Funding, at 305-525-6742. Your Miami-Home-Loan expert! If you want to see what other buyers have said in their review, please go to https://socialsurvey.me/pages/james-carter. And, If you want to APPLY ONLINE NOW, go to http://www.elementfunding.com/branches/5321/jcarter. Click the APPLY NOW button on the right side of the screen and apply on our secured site.