MANCHESTER, NH – In light of the trend in record-low numbers of first-time homebuyers, local lenders are offering programs targeting young professionals that may provide options to help them achieve home ownership.
According to a report released this month by the National Association of Realtors, the number of homes sold to first-time homebuyers this year remains below the traditional threshold of 40 percent of the market share.
Only 29 percent of the homes sold in September were to first-time homebuyers, well below the 50 percent share first-time homebuyers accounted for five years ago.
First-time homeowners have traditionally been a major part the housing market’s foundation, serving as reliable buyers when the real estate industry is in a period of recovery. Their desire to buy new homes helps existing homeowners sell their current home and buy another.
According to Lawrence Yun, chief economist for the NAR, buyers “need greater access to credit for a sounder housing recovery. Affordability conditions remain favorable in much of the country, but consumers need access to safe and sound financing… and with low down-payment options for first-time buyers.”
Lenders are working to find programs that appeal to potential first-time homebuyers. New Hampshire Housing is one agency experienced working with first-time homebuyers, while Bellwether Community Credit Union recently introduced Smart Money mortgages, a product aimed at first-time homebuyers.
Finding new types of products with caps and longer adjustment periods are part of the approach lenders are using with first-time homeowners. The Smart Money mortgage, for example, is a 5/5 adjustable rate mortgage, which means the interest rate is adjusted every five years until the mortgage matures.
Bellwether Mortgage Manager Heather Tancreti said the Smart Money Mortgage is a way the credit union can offer a program targeted to young professionals who have established themselves as far as credit goes, but don’t want to wipe out their savings on a large down payment.
Programs such as the Smart Money Mortgage are designed to help members buy their first home faster by requiring a smaller down payment – as little as three percent down – and reducing the housing payment overall by removing the Private Mortgage Insurance (PMI) typically required by lenders for borrowers putting less than a 20 percent down.
“The Smart Money Mortgage with its discounted rate and no PMI offers a great option for first-time homebuyers who want to get into a new home without breaking the bank,” Tancreti said.
About Bellwether Community Credit Union
Bellwether Community Credit Union offers financial services to consumers who reside or work in New Hampshire. As a not-for-profit credit union, Bellwether focuses on returning value back to members through attractive rates and low fees; local, personal service; and services, delivery channels and processes that make members lives easier. Members can access their accounts at more than 28,000 free ATMs nationwide and approximately 6,500 CU Service Centers around the world. Bellwether Community Credit Union has branch locations in Bedford, Manchester and Nashua. Equal Housing Lender. For more information about Bellwether Community Credit Union, visit BCCU.org.