Debt Consolidation Credit Counseling In Phoenix

First time buyers who were getting their first mortgages were traditionally the golden goose for banks because once a bank had their business they usually had it for a long time and they made a lot of money off of them. However, first time buyers are now getting to be less and less important for banks because they are traditionally more risky than buyers who have established credit. So, how are first time buyers affected by the down turn in the economy?

It isn't that easy to answer this question. To do so, first you must remember what first time buyers got when there wasn't a credit crunch. Before, first time buyers got a break on the interest rate that they paid or were able to get a mortgage without the traditional 20% down payment. Those who didn't put a lot of money down on their houses often found that they were in trouble when the economy soured. It was the banks who saw the effects of a lot of first time buyers who couldn't afford their houses and they are now rethinking their position on these special deals.

So what does this mean if you already have a first time buyer mortgage? Well, the good news is you don't have to worry if you are sitting pretty with a good interest rate or any other special deal in your home. The results of the credit crunch are going to happen in the future, and people who want to buy their first house now are probably not going to get the same good deals that you did. What they are going to be able to expect is to have to pay more for a down payment, or if they do get a low down payment like five or ten percent, they are going to have to pay a whole lot more in mortgage insurance to cover the risk. This is going to add a lot of money to their mortgage bills every month, making a low down payment mortgage a lot more expensive for them.

In the future, there probably won't be as many first time buyer mortgage deals, because banks are not going to be able give away as many specials. In fact, mortgages are going to become more and more pricey and with the financial times changing, banks are going to be more cautious with lending out their money. Before, any Average Joe could get a mortgage, but in the future, you are going to have better credit and have a lot more security in order to get a mortgage. If you have good credit and are a good consumer this is going to be a benefit to you, because you are going to have to pay less for those who ruin it for you by purchasing a house way out of their budget. Every time someone defaults, you end up paying a little bit of their mortgage, so the less people that default the better it is for you. If you have bad credit, this might not be the best news for you.

First time buyers are going to be affected by a bad economy and problems with housing foreclosures. There is nothing that can be done now so consider yourself lucky if you already have your mortgage.