BigNews.Biz - Apr 30,2012 - Prospective homebuyers attended a free homebuying seminar recently hosted by Walters Homes at the Atlantic Heights Clubhouse. Financial experts offered advice on navigating through the homebuying maze, including a discussion of the many mortgage programs available, understanding credit scores, and the benefits of buying versus renting in today's market.
Guest speakers included three of Walters Homes' preferred lenders, OceanFirst Bank, Van Dyk Home Loans, and Wells Fargo Home Mortgage as well as Let's Talk Credit Scores, a credit information provider.
"Buying a home in this area is well within reach," said Cynthia Kelley, branch manager for Van Dyk Home Loans, who discussed the USDA Rural Housing Mortgage program. For instance, the average cost of renting a three-bedroom, 2 ½ bath, 1,300-square-foot apartment in southern Ocean County starts at roughly $1,650, according to Kelley's figures. In comparison, monthly housing payments on a new 1,900-square-foot Whispering Hills townhouse in Barnegat amounts to $1,767, including taxes, insurance, and association fee. "Only $117 more per month gives you home ownership with more square footage plus over $15,000 in tax savings over five years," said Kelley.
In today's market, mortgages are more attractive than ever, but choosing the right one depends on a variety of factors such as credit scores, down payment, and income levels. Conventional loans, for example, offer pros and cons, according to Michael Frankovich, vice president and sales manager of OceanFirst Bank. "It's the easiest, cheapest, least cumbersome to process, and has the fastest delivery." For instance, homebuyers with a good credit score, who opt for a 30-year fixed-rate loan, can lock in at 3.87 percent with 0 points at closing. The downside is that they require larger down payments than government-backed loans. To assist prospective buyers, the bank's First Home Club, sponsored by the Federal Home Loan program, offers qualified customers a savings incentive of up to $7,500 toward a down payment when they obtain mortgage financing through the bank. Another option is the NJ Housing and Mortgage Finance Agency's Smart Start Program, offering first-time homebuyers down payment assistance of up to 4 percent, explained Frankovich.
Buyers looking for more lenient credit requirements can opt for a Federal Housing Administration (FHA) mortgage, explained Len Herbert, home mortgage consultant for Wells Fargo. "There are no income limits to qualify. But the limit on the loan in Monmouth and Ocean County is $729,750." VA loans, available to veterans and active military, offer 100% financing with no money down, and no mortgage insurance, according to Herbert.
The myths and misconceptions surrounding credit score reports were discussed by Carl Rinyu, credit score specialist with Let's Talk Credit Scores based in Brick. "Scores range from 350 to 850, and the average credit score for mortgage lending starts at 620," he explained. "There are a total of five factors that go into the calculation of a FICO® credit score. However, of those five, just two account for 65 percent of the total." Thirty-five percent is dictated by payment history, 30 percent is amounts owed, 15 percent is
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