- The Washington Times - Thursday, January 26, 2006

With the cooling of the housing market, first-time buyers need to be assertive. They should elbow their way to the front of the home-buying line now.

Cooling — or normalizing — doesn’t mean the market is tanking. It means what it says: It’s going to be more normal. Housing will continue to appreciate, sellers will continue to sell and buyers will continue to buy.

The question is whether buyers will take advantage of this leveling off and get a good deal while the sellers are forced to give up a few things.

One item sidelined during the searing market of the past few years was the common-sense financing offered through various government and private agencies to help first-time and cash-poor buyers get into the home market.

The National Association of Realtors released its annual Buyer Survey a couple weeks ago, revealing several interesting points. Some 40 percent of all buyers are first-timers; of those, 43 percent used no-money-down financing. In addition, use of the Internet for all buyers has crept up to 77 percent, and there’s no reason to think that trend will falter.

Interestingly, old-fashioned open houses were the second most commonly used tool by buyers to look at houses, used by 71 percent of all buyers.

Search “first-time home buyer” on the Internet and millions of Web pages pop up.

Let me narrow it down for you so you can find the financing of choice for home buying in today’s market.

• U.S. Department of Housing and Urban Development (www.HUD.gov) is a great first stop. The HUD programs are a lot more forgiving of credit issues than most of the conventional programs on the market. In addition, the site is loaded with information on how to get access to the financing the organization insures. Keep in mind, a HUD loan only means a mortgage program is “insured” by HUD, not funded by HUD.

• Both Fannie Mae (www.FannieMae.com) and the Federal Home Loan Mortgage Corp., known as Freddie Mac (www.FreddieMac.com)are fabulous resources for first-time buyers. These two companies provide the largest source of funding for all mortgages across the country. They provide the most nonbiased information about the programs they offer. Nevertheless, don’t overlook sites of mortgage companies that take the Fannie Mae and Freddie Mac programs and may create hybrid loans out of these programs to make them even more favorable to the first-timer.

• The National Council of State Housing Agencies (www.ncsha.org) is a nonprofit organization founded more than 30 years ago by the country’s state housing agencies to “coordinate and leverage their federal advocacy efforts for affordable housing,” the group’s Web site reports. The benefit to buyers of this site is its directory of state housing agencies across the country, including every state, the District of Columbia, Puerto Rico and the Virgin Islands. The agencies monitor, lobby for and administer the disbursement of money from federal programs that provide lower interest rates for consumers, along with several other benefits to first-time and low-income buyers. With a leveling off on the market, buyers should reacquaint themselves with these very stable programs.

Finally, here are some tips for the first-time buyer as you look to find financing for your home.• While these Web sites can be helpful in education, find a mortgage professional you can meet face to face. When you step into the process, it’s best to call and meet with an experienced professional. Get a referral from friends, family, co-workers or your agent.

• Act sooner rather than later to apply for your loan. Interest rates today are around 6 percent. All the mortgage-rate watchers are predicting a rise in the mortgage rate to 6.75 or 7 percent by the end of this year. Delay much longer and you may lose buying power just by waiting. Your monthly payment will stay the same, but the amount of house you can afford may drop because of an increase in the interest rate.

• Look at hybrid loans to help keep your monthly costs down. A program that combines two or more loans to eliminate mortgage insurance premiums, which can be very expensive each month and cut your buying power. Ask your mortgage professional about this.

• Look around for help with the down payment. You could get help from family. You could even sell some items in your house that could give you more money for the down payment. Could you sell the car (the one with the payment) and buy one with cash? That debt relief alone could get you into your home a lot easier than any other move.

• Finally: Research, research, research, but don’t get frozen into inaction. At some point, you need to dive in to see if the home-buying water is fine for you. Best of luck.

M. Anthony Carr has written about real estate since 1989. He is the author of “Real Estate Investing Made Simple.” Post questions or comments at his Web log: http://commonsenserealestate.blogspot.com.

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