First Time Home Buyer

As a first time home buyer, you can increase the degree of difficulty in the process of obtaining finance, not only because of the lack of credit history that it implies, but because of inexperience or ignorance on the field. Here are some tips to help you get started.

The Down Payment Issue

A Down payment in the order of 10% to 20% is usually required for obtaining a home loan to buy home. There are also closingcosts that you’ll need to pay in order to secure the loan. If you add up these two factors, very few can afford putting down so much money.

The financial industry, however, has found a solution to this problem and offers a new financial option. Zero Down Mortgage Loans are meant for those who cannot put away enough money for a down payment. With these loans you can finance 100% of the property’s value. Moreover, for those who cannot even raise the money for closing costs, there are lenders offering 103% or 105% Finance Home Loans. The extra percentage is used for covering the closing costs which will then be included in the overall debt that you’ll have to repay in monthly installments.

Drawbacks of Lack of Down Payment

Zero Down Mortgage Loans sound tempting but though not having to put money down in order to purchase a house can seem to be a fabulous waiver, it has many drawbacks and unless strictly necessary, it should be avoided by all means possible.

A down payment has not only direct positive financial consequences but it also can be a positive factor when the lender has to decide whether to approve your loan or not and on what terms. When the lender has to consider your application, a down payment tells him that if you were able to save enough money to make a considerable down payment, you’ll probably be able to meet your monthly payments without any difficulty.

A down payment will also imply that you have the ability to obtain finance elsewhere and so, the lender will try to offer you a more tempting loan proposal in order to keep you as a client. Those who can offer a down payment always get a considerably lower interest rate than those who cannot.

As you can see, a down payment reduces dramatically the risk implied for the lender in the financial transaction, and thus, you’ll be able to get a better deal on your loan. A down payment won’t only reduce the interest rate you pay; it will also lessen all the other loan requirements and will turn the loan terms more flexible. You’ll be able to get stretchy monthly payments and larger loan lengths too.

Home Equity Loans

If you wanted to use that money for making home improvements or for other expenses, you don’t need to worry. Once the deal is closed, the amount you had to put down will become home equity and you’ll be able to request a home equity loan for the difference between your home value and the amount owed on the mortgage. These loans are secured and carry low interest, they are the perfect solution if you ever you need the money used for the down payment.

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The government’s new stimulus, when it is all printed out, is a very large document. Somewhere in the midst of all that paper are a few lines that can save Americans hoping to buy a home a lot of money.

The Senate Approves a $15,000 Tax Break for Homebuyers

Under the new stimulus package, qualifying first-time homeowners will get a $8,000 tax credit. According to the plan, if a person who has not owned a home before buys one this year, and they meet all the guidelines, they can get this tax credit. The real advantage to this tax credit is that it does not have to be repaid. Under the old plan, homeowners who bought their homes between April 9, 2008 and July 1, 2009 were given a $7,5000 tax credit, but it was really just an interest free loan that had to be repaid in 17 years. The new tax credit is larger and does not have to be repaid, but it does come with a long list of requirements that covers everything from the date of purchase to the homeowner’s income.

$8,000 Tax Credit Eligibility Checklist

The homebuyer must be a first-time homebuyer. Under this plan the definition of a first time homebuyer is someone who has not owned a home for three years prior to buying this one.

The house has to have been purchased during the time between January 1 and December 1, 2009 calendar year. This is an absolute. There are no extensions and homebuyers need to be aware that the deadline is December 1, not 31.

The buyer’s MAGI (modified adjusted gross income) must be less than $95,000 for a single person and $170,000 for a couple who file a joint return.

The buyer’s modified adjusted gross income (MAGI) is less than $95,000 for an individual or $170,000 for a married couple filing a joint return to be eligible for the maximum tax credit. As the income level rises, the amount of credit declines until the buyer’s income is $95,000 and then no credit is available.

The homebuyer has to be purchasing a house that is going to be lived in. The tax credit cannot be for a non-primary home, one that the homeowner is not planning to live in. The home can be a detached home, a townhouse or condominium, a manufactured home or a houseboat, but the homeowner must intend to live in it.

The buyer must live in the home for at least three years after the purchase date. The homeowner cannot move, sell or leave the home for any other reason for three years. Otherwise the tax credit must be paid back.

The home must be valued at $80,000 or more. The plan states that the homeowner can get up to 10% of the home’s value and to get the maximum of $8,000 the home must be worth over more than $80,000. Married couples can file separately and will get a maximum of $4,000 each.

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www.notapennydown.com Mark Fidgett, a mortgage broker in Vancouver Canada, explains the one thing you absolutely must not do before you buy a home

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The combination of low prices and low interest rates is unusual and probably not even in our lifetime can not be duplicated. In addition, the government has created some great programs home buyers only to the first – period.

The First – Time Homebuyer $ 8,000 Tax Credit: The First – Time Homebuyer $ 8,000 Tax Credit:

The Housing and Economic Recovery Act was passed in late 2008. However, extended the provisions of the Congress is the> First weeks of 2009. While money initially needed to be paid back, now is not – and the credit was increased from $ 7,500 to $ 8,000. If you do not have a $ 8,000 tax liability, do not worry – you will receive back the difference in the form of a refund! Here is how it works:

– You must first purchase one – time homebuyer 3 (defined as not owned a principal residence years before the date of).
– The house must be purchased between 8 and 2008 Aprilbefore 1 December 2009.
– The credit is 10% of the purchase price, up to a maximum of $ 8,000.
– How to receive full credit, your gross income adjusted $ 75,000 or less if you are single or $ 150,000 for married couples filing jointly file. The loan is individually for AGI's between $ 75,000 to $ 95,000 (registration) or phase out between $ 150,000 to $ 170,000 (filing jointly).
– If your tax liability is less than the credit card, you receive a refund for the difference!
– You must live inthe property as a principal residence for 36 months, or you will be required to repay the loan.
– You must buy the house from a third party.

FHA loans:

Although FHA loans are not restricted to first - time buyers, low down payment requirement and easier to make their underwriting standards, they are ideal for most first – time home buyers – especially in today's tighter lending environment. And interest rates are verycompetitive. FHA does not make the loan; they insure the lender against default. Therefore, many lenders make it easier for you to qualify.

And FHA is an excellent loan product for a first-time homebuyer. The program is not limited only to first-time buyers, but it is limited to buyers purchasing their primary residence. Investors are not able to take advantage of the favorable terms of an FHA loan. What are those terms?

- You only need put 3.5% of the purchase price as a down payment – and the money can come from a family member.

- It is easier to qualify for the loan. You may still be able to qualify for a loan, even if you have had credit problems or a bankruptcy.

- Interest rates are competitive with conventional mortgages. (However, you should compare interest rates from different FHA-approved lenders to make sure you’re getting a good deal.)

- A buyer with credit problems can take advantage of much lower interest rates than a traditional sub-prime loan.

- You will be required to pay for mortgage insurance which is charged as an upfront premium of 1.5% – 1.75% of the loan amount and then as a monthly fee included in your monthly mortgage payment.

- Some allowed closing costs or credits can be added to the loan amount.

- You must occupy the property as your primary residence – however, there is no time restriction as with the Tax Credit.

- Approved condos and 1-4 unit properties qualify.

- The condition of the property must meet FHA guidelines.

- FHA loan limits apply. These will vary from region to region but have been increased recently to make the loans more widely practical.

FHA 203(k) Loans:

For properties in less than perfect condition, FHA offers a Rehab Program known as a 203(k) loan. This program provides all the benefits to buyers of an FHA loan as outlined above while also funding the cost to repair and rehab a property.

It’s a nice program especially for first-time buyers because you are able to borrow the money you need for any repairs right up-front. And, since you are required to use FHA approved contractors and an FHA approved inspector, you know that the work will be done correctly.

- The property must be an FHA approved condo development or a 1-4 unit property.

- You must occupy one of the units as your primary residence. These loans are not available to investors or rehabbers.

- You only need a down payment of 3.5% of the final loan amount. For example, if your purchase price is $100,000 and your rehab costs are $50,000, you will need a down payment equal to 3.5% of $150,000 – or $5,250. Don’t forget, this money can come from an immediate family member! (FHA loan limits apply.)

Eligible Improvements

As a rule, luxury items are not eligible. However, the homeowner can use the program to paint, add rooms or decks even if the home does not need any other improvements! All health, safety and energy conservation items must be addressed prior to completing any other general home improvements.

The 203(k) program has been around a long time. Many agents and lenders have steered away from it because of the complicated paperwork involved in the program. However, FHA has streamlined the process considerably and it is possible to close a loan in a normal time frame – often in less than 60 days.

Although there is additional paperwork and added inspection fees, many of those can be rolled into the loan. And it provides a tool so that a typical homebuyer can take advantage of the bargains available in foreclosed properties.

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Are you buying a new home? If you make the transition from renter home buyers, you'll probably find that there are some hidden costs to ownership. Starting at closing, could further expenditure on housing, which you had not considered cost you money you would have never expected to spend. For more information visit www.moneymanagement.org

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With generous support from the Tax Institute. Learn more about the first-time home buyer loans, new car sales tax deduction, and the Alternative Minimum Tax (AMT) exemption. Good news! The first time homebuyer loan was extended and signed into law on 6 November 2009. We will be updating our video to bring you the latest information on these changes. In the meantime, visit www.thetaxinstitute.com more details read the changes.

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On Saturday, June 27, 2009, Senator Johnny Isakson held a "First-Time Home Buyers Forum in Lawrenceville, GA. He welcomed the participants of the Forum with a discussion of the tax credit available to first-time home buyers, and gave an overview of the current state of the housing market. 27th June 2009.

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A www.CHFAmortgageLoan.com CHFA mortgage loans is a first time home buyers for Connecticut residents CHFA mortgage loans offer low fixed rates and Down payment assistance. If you have a house in Connecticut, the CHFA Mortgage Program buy "chafa" seeking the way to go. CHFA home loan offers special incentives for police officers, teachers and military personnel to buy a house in Connecticut.

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In British Columbia, the first time home buyer is an exemption from real estate transfer tax when purchasing their new home. There are some eligibility requirements for both the home buyer and the property itself.

Who is entitled to the exemption?

To a land transfer tax exempt, the home buyer must be ALL of the following:

* A Canadian citizen or permanent resident

* A person who has residedin British Columbia for 12 consecutive months immediately preceding the date of registration of transfer, or who has filed two tax returns as a British Columbia resident within the last six years,

* A person who never, at any time, held a registered interest in a principal residence in the world (defined as a principal residence occupies the usual place where an individual), and

* A person who has not previously received an exemption or FTHBRefund.

What property qualifies for exemption?

After the first time home buyer program, the total exemption from real estate BC is only applicable if:

* The improvements on the property your main residence (whether they are formally classified as residential),

* The land is 0.5 hectares (1.24 acres) or less and

* The value of the land and improvements below the set thresholdof $ 425,000.

The above threshold applies to purchases registered on or after 20 February 2008.

What about partial exemption?

If any part of the improvements on the land are for purposes other than the purchaser principal residence, as if part of the improvement is used for commercial purposes or where there is a separate residence or residential improvements on the land, only the part that uses is the buyer's primary residence for the comingLiberation. If the country, more than 0.5 hectares, only the residential improvement and 0.5 hectares of land for the exemption. If a property has a market value of up to $ 25,000 more than the threshold value, the property is entitled to a partial exemption.

When the refund claim be made in?

A home buyer can transfer the debt relief at the time the office is registered in the Land Register.

OccupancyNeed

During the first year of ownership, homeowners must occupy the transfer, the property 92 days after being registered office in the land register. The buyer then has the status of his or their use for the primary residence for at least a year since signing in the transfer in the Land Office.

If the property is bought free country, and the buyer wants to claim the first time home buyers exemptionPrincipal residence must be on this land will be built within one year after the transfer registers, and the buyer then has to live on the property for the rest of the year to receive the full exemption.

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I saw the lockbox on this unit on my way to LIttle Italy and decided to check it out. It’s a gem! This 1 br, street level foreclosure unit is located on Market Street, in 235 Market Building Downtown San Diego. The Location makes it perfect, although probably will not go FHA, or VA. Conventional or Cash Financing Only. HOA’s $450 a month Great Oppornuty for First Time Home Buyer Khrystyna Chorna aka Real Estate Supergirl

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