JoAnn Pomatt…, Real Estate Pro in Santa Barbara, CA

Are you seeing renter's trying to enter the home buying market? If so, are they mostly FHA financing?

Asked by JoAnn Pomatto-Gomez, Santa Barbara, CA Thu Feb 14, 2013

Help the community by answering this question:


JoAnn, It is sad to see so many stating FHA buyers have no prayer! I close FHA loans every bit as quickly as Conventional loans, have not had any appraisal issues and the underwriting criteria is far more flexible. I do work with agents who are having some success with getting offers accepted....even in the Bay Area. It seems FHA still has a bad rap...and, for the most part, it is undeserved.

That said, I am trying to flip my clients to Conventional loans. It has nothing to do with their purchase power and everything to do with saving them money. The combination of the upfront MIP at 1.75% and monthly mortgage insurance at 1.25%....and going to 1.35% shortly...just make it a no-brainer to go Conventional if at all possible. The private mortgage insurance is easily 30 - 50% less than FHA.

Topping that off, in April the monthly mortgagae insurance on FHA become permanent for the life of the loan. Essentially, every home buyer using FHA should be looking at an exit strategy to get into Conventional financing asap.

All my best,

NMLS #279125
(915) 795-4547
2 votes Thank Flag Link Fri Feb 15, 2013
Although I believe many renters would love to purchase given the low interest rates and the high rents, it is difficult. I agree with Tina, the FHA buyer has little chance of getting an offer accepted in today's market. The competition is fierce at the 'entry level' properties.
Good luck,
0 votes Thank Flag Link Fri Feb 15, 2013
The renters are inquireing about purchase ,I have had a few interested even though the market invites buyers,the qualifications are necessary for purchase ,should the renter be serious my recommendation is get started to be directed in the right direction .HENA MARTIN BROKER 760-251-2868
0 votes Thank Flag Link Fri Feb 15, 2013
Renter's in my market are moving up to home owning due to low rates, different loan options and inclining market. Most of my clients opt for VA loans due to the military community and of course me being the military service members choice due to my background as a USMC Veteran. Every market and agent will have their own trend due to the location and branding.
0 votes Thank Flag Link Fri Feb 15, 2013
I see a combination of loan types, and I keep u with lending trends. I also ask the lender if there is a better program for the client. More renters are trying to enter the market, but starter home inventory is about 1.7 weeks inventory here.
0 votes Thank Flag Link Fri Feb 15, 2013
Yes, lots of renters are coming back to buy. I've not come across any with FHA financing. Frankly, buyers with FHA financing don't have a chance in the Bay Area at the moment.

Most first time buyers have at least 20% down, if not 50% or more. They're coming up against heavy competition from trade-up, investors, and foreign buyers with all cash bids.
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0 votes Thank Flag Link Fri Feb 15, 2013
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