Austin Warty asked:




With the billions of dollars in free grant money that the government is giving away, government grants for first time home buyers can also be obtained. These programs can help you with your down payment, reduce your mortgage interest rate, and even assist with your closing costs on the purchase of your new home. You just need to ask for it.

While a significant portion of these grants are provided for low income housing and those facing financial hardship, there are plenty of grant programs for those who aren’t necessarily having a hard time financially. For example, you can find grants for first time home buyers who are purchasing a new home in developing areas.

The grants that are available to you today vary from state to state. Each state, county and even city have different programs, so you will have to do a little bit of homework. But anyone who is purchasing a home for the first time should not overlook this option when it comes to financing their purchase. This is free money for you that you may never have to pay back.

By knocking a couple percentage points off your mortgage rate, you could save hundreds of thousands of dollars over the life of the loan.

All you need to do is ask for the assistance in order to receive this money. In some cases you have to find and apply for these programs yourself, where as others may be found just by asking your lender if there are any special programs available for first time home buyers. While they may be obligated to tell you, they may not always be so willing to give up that information. After all, your lender makes money off the size of the loan they sell you.

Willie

Alex C Johnson asked:




Are you looking for first time home buyers loans to help you get the money you need to buy your first dream home? Then this type of loan will help you with great benefits to make it easier for you to afford your desired home.

It is a fact that most people who decide to buy a home, may not necessarily have all the money to pay for the house or apartment upfront, and that’s natural.

That’s when home loans come to help. More and more people are going after home loans these days as these loans are easy to get and convenient for the average person.

But there is also a new added advantage for people who are buying a home for the first time, called as first time home buyers.

Here are two of the best options you have about lenders to get the money from…

1. Private home loan lenders

2. Government lenders

First, it is best to find out more about the different types of home loans and choose which one you need now. Then you can go for the lender who offers it.

The secret is, government lenders usually offer cheaper home loans and better interest rates which means you are going to save more money and pay less in the long term.

But private lenders usually ask for higher interest rates. On the other hand, you can find a bigger number of private lenders which means a wider range of choice on what to go with.

So at the end, it is up to you to compare various home loan lenders and choose the best one for you.

Just make sure you find lenders who offer the special home loan for first time home buyers which includes more benefits and easier options. You can also apply for this type of loan even if you have a bad credit.

Martin

Simon Berby asked:




With a First Time Home Buyer Loan, people on a middle or low income find it is possible to buy their own home. The low economy is a major factor in people not thinking about buying a new home at present, and yet they are not considering that property prices are also very low right now.

People who are experiencing economic difficulty and need to buy a home are the ones who benefit the most from First Time Home Buyer Loans. They are able to save wasted money going into rent; instead it can go towards paying off their loan and eventually fully owning their home. There are different options of loans available, whether people are looking to buy their first home or whether they have owned one before.

There is a first time home buyers loan which is known as a FHA loan. For people who are buying a home for the first time this is the best loan. The down payment is only 3.5%. And a very big plus is that a person can have a credit statement which shows a ratio of very high debt against their income and it will not affect their eligibility. In addition to the low down payment the monthly payments for insurance on these loans are also lower since the FHA will charge a buyer a percentage on a monthly basis. This is also what is called MIP funding fee.

To find out about these loans, which actually are a government loan program, you will need to visit a mortgage company or bank. The best idea is to find a mortgage company that specializes in FHA loans and sign up with them. They will have a much larger portfolio and should have better rates than a general mortgage company.

Some advice if you are looking to sign up for one of these loans, is to do your research well and to work out your finances to make sure you can easily afford not only the down payment but also the ongoing payments of the loan. You may be enticed by the low down payment but it is wise to also factor in the possibility of a change in your economic circumstances.

If you have some money saved up and are wanting to buy your first home, the first time home buyer loans are the best way to have a good investment. However you don’t want to end up having to forfeit your home because you over stretched your finances, as tragically we have seen happen for many people over this last couple of years.

The lender you consult with will be able to advise you on which type of loan best suits you. First time home buyers loans are great in every way and are one of the cheapest home loans available.

Miguel

Jeffrey Ragan asked:




Most first time home buyers do not have the required down payment necessary to obtain a loan. Loan requirements can range from 3% to 20% down payment. Thus the need for down payment assistance is born. Since this is a requirement, the search for first time home buyer assistance begins.

What are Down Payment Assistance Programs?

They are organizations that serve as a third party to your transaction. For the most part they are a non-profit charity organization. This is really legal!! All you have to do is get the seller to allow you to use down payment assistance for your down payment and find a lender who permits this type of transaction.

Why do I need the seller’s permission?

Quite simply its because you will be asking the seller to make a charitable contribution to the third party organization equal to your down payment plus whatever their administration fee is. Is the seller making my down payment? Not really, you are, let me explain. You’re going to borrow the down payment money from the lender and then give it to the seller and he/she makes a donation to the charity. So you see, you are the one that is making the down payment. The charitable organization puts up the money to get the transaction started and then receive the money back from the seller at closing. The seller gets the money from the lender to donate to the charity, so he/she is just the “middle man.” But the seller has to agree to be that “middle man”, thus their permission is needed. But don’t forget, you will need a lender who will permit this type of transaction as the down payment.

What kind of lender will permit this type of down payment?

Unfortunately, not all lenders will permit first time home buyer assistance. FHA is one program that will permit this type of down payment help. Let me tell you a little story. I had a single mother come to me for a home loan. She was looking to buy her first house. Now she had 1 child and was expecting another. She had been working on the same job for about 4 years and was making pretty good income. She had two problems. One, she did not have any down payment money. Two, she had about $2,000 in medical collections on her credit report. Her credit score was low because of this.

To make a long story short, she bought that house with only $500 out of her pocket and she paid off the collections at the closing. So she became a new home owner and was able to improve her credit picture at the same time. She wouldn’t have been able to do this without the charity organization providing the first time home buyer assistance and the seller willingly becoming the “middle man.” Wasn’t it awesome that the buyer could get that kind of help?

What kind of charity organizations do this?

These type of organizations are called Charity/Not-For-Profit 502c3. You don’t have to be a first time home buyer to receive this type of assistance either. Most states have these type of organizations to help. Remember, this is not a grant. Grant money doesn’t have to be paid back, but this type of first time home buyer assistance you will pay back in your loan. So, it’s not a gift. The funds are later wired to the Charity/Not-For-Profit 501c3 organizations as a donation. Beware of a 501c3 organization that calls these funds grants, because its not free money. They require a donation back.

The cool thing is there are no income limits, house price ceilings, and you can be a prior home owner. You can use this kind of first time home buyer assistance no matter the price of the home. And it is legal!!!

So if you want to buy that first home, this is a fabulous way to get that needed down payment. Although there’s some work involved. You have to find a lender who will permit this type of down payment and a seller who is willing to be the “middle man.” And most importantly, a charity organization that provides this type of assistance. This doesn’t happen quickly, so be sure to allow plenty of time to get your “ducks in a row!”

Cody

Bill Gatton asked:




Everyone wants the American dream, but achieving that dream is has become difficult. There are lots of families in America that want a house. Since it would be their first home, it’s much trickier to secure funding for a down payment. Thanks to government grants for first time home buyers, getting a home has gotten easier.

A government grant is money that the government sets aside every year to help people pay for things. Money from the government will not only help you pay for your down payment, but the money can also be put towards closing costs as well.

To get more information about how you can receive help to buy your first home, go to a government-sponsored grant site and get an application. After you have done all of your reading, and you’re ready to apply, make sure that they deadline has not passed. The government offers many programs for financial assistance, and each one has its own deadline. You will want to be sure that none of your deadlines have passed before you have had the opportunity to submit your application.

Part of the application process is your demonstration that you have a significant need for assistance as well as proving that this will be your first time purchasing a home. Be prepared to provide tax information on you, your spouse, and your dependents. These are all important factors toward determining whether you will get financial assistance. Submit your grant application and make sure that you have everything filled out and included everything that is requested. If you forget to include anything, it could stall the process and prolong the wait before you receive any aid.

While the application process may seem long, the best thing about it is that you can receive help with your application. The government even assists you with understanding all the information during the application process. Once you receive your funds, it’s yours. You don’t have to pay it back because it’s not a loan. Never again do you have to worry about waiting for the bank to approve your loan, and you don’t need to be embarrassed about your credit rating. There are funds available on both the state and federal level so you can apply for both to increase your chances of getting aid.

Buying a home is so much easier now because there are government grants for first time home buyers available. While the state of the home market is still uncertain right now, first time home buyers don’t have to worry about their dreams. The government has you covered.

Joy

Ron Piner asked:




What You Can Expect From Your New Home

When one acquires his or her first new home, there is great expectation of a new income tax deduction. This expectation exists for both single folks and married couples as they wander into the new world of itemized deductions. No more do we get to fill out the short income tax forms, we must now use federal form “schedule A” to get the tax goodies that others have promised. What lies in store for the first time home buyer? What income tax benefits really do exist and how does the first time home buyer go about getting the benefits? This is what we came to discuss and we will not rest until a firm understanding of first time home buying is reached.

Step One-The Settlement

Before moving into a new residence, the all anticipated settlement date must arrive. Are there income tax deductions on the settlement sheet? There certainly could be. If points are paid to obtain financing, these points are income tax deductible and include points paid by the seller. There must be enough money paid by the borrower at settlement to cover the amount of points paid in order to get a current income tax deduction. When seller paid points are taken as a tax deduction, the cost basis of the home must be reduced by the seller paid points. For example, if a new home is purchased for $400,000, and the seller pays one point or $4,000, the buyer can deduct this amount but will reduce the home’s cost basis to $396,000. The deduction of points in the year of settlement is unique to the purchase of a principal residence. Any other purchase of real estate would require the amortization of points to expense over the life of the loan.

Real estate taxes paid at settlement are also deductible. This is the amount on page one of the settlement sheet that reimburses taxes paid by the seller in advance of his leaving the property. Taxes placed in escrow (usually displayed on page two of the settlement sheet) are not currently deductible as settlement expenses but will be deductible when disbursed by escrow. The remaining items on the settlement sheet are not currently deductible and should be capitalized as cost of the residence.

The time of year that settlement on a new residence occurs can have a significant impact on the availability of income tax deductions. For instance, suppose a married couple settles on a new home in December. Because this is their first home, they have not been itemizing deductions but instead have been using the standard deduction of $10,300 (2006 standard deduction for married couples filing a joint return). They will not make their first mortgage payment until January of the next year. Because of this, it is likely that the deductible settlement costs will be of little or no value to the happy home owners. They would have been better off to push settlement over to January and into a year where they would have twelve mortgage payments, real estate taxes, and could make maximum use of deductible settlement costs. Please plan your transaction accordingly.
Going Forward

Looking ahead, the first time home owner can look forward to deducting mortgage interest expense from their income taxes. This is true as long as their original acquisition debt does not exceed $1 million. Real estate taxes will also be deductible providing that the home owner or owners are not in the alternative minimum tax. Assuming that alternative minimum tax does not apply, the first time home buyer can expect to get tax deductions for both the mortgage interest and the real estate taxes paid during the year. It is even possible to get the tax advantages of home ownership immediately by changing withholding allowances.

Let’s assume that a single taxpayer will have $20,000 in mortgage interest deductions and $4,000 in real estate taxes. Because this taxpayer’s standard deduction of $5,150 is built in to the tax withholding tables, we know that he can take an additional $18,150 in deductions ($24,000 less the standard deduction of $5,150). In order to get the tax benefit currently, the taxpayer would file a new W-4 form (withholding allowances form) with the payroll department where he works. This taxpayer would be eligible to claim an additional 5 exemptions ($18,150 divided by $3,300 which is the personal exemption allowance) which would thane serve to increase net pay over the upcoming weeks.

This process works similarly for married couples except that the standard deduction used for determining additional deductions is $10,300. I should mention this caution. If both husband and wife work, each has a standard deduction built-in to their respective withholding tables. In this case, the amount that is used to calculate excess deductions is $20,600. Don’t forget that other deductions making up itemized deductions include state income taxes withheld or paid, charitable contributions, casualty and theft losses, medical expenses exceeding adjusted gross income limits, and miscellaneous deduction (typically from un-reimbursed employee business expenses). Remember, if a taxpayer is in the alternative minimum tax, there will be no benefit for income and real estate taxes paid and no benefit for miscellaneous itemized deductions. This is supposed to be a simple overview of what a new homeowner can expect in the way of income tax benefits. Unfortunately, nothing is ever really simple.

Roberta

Jed C. Jones Ph.D. asked:




First time home buyers often face some common barriers to qualifying for a new loan: poor credit, feeling a bit overwhelmed, and a lack of knowledge about available options. Here are 5 tips to get you on the road to home ownership.

Tip #1: Start now to improve your credit score: Having a low credit, or FICO, score is one of the biggest barriers to qualifying for a mortgage for first-time buyers. This is even true for people who have perfect payment histories and very little outstanding debt. Why? Because those two items only make up 65% of your credit score.

The remaining 35% of your score reflects your status in these areas: length of credit history, amount of recently-approved or “new” credit, and variation in types of credit currently extended to you. All of these latter three factors particularly affect first-time buyers. What to do? Start improving your credit score right away.

Tip #2: Educate yourself about all of the loan factors: If you have never applied to or been accepted for a home loan before, it is natural that you may not know about all of the factors to consider when applying for a loan. There are multiple ways to structure your loan and a myriad of variables above and beyond just the rate you are getting. If you are just calling around asking for a good rate, you will likely get into a mortgage situation that does not take into account all of your needs. Make sure you educate yourself about all of the options available to you before you start making phone calls.

Tip #3: Be persistent despite feeling overwhelmed: For those who have never owned a home, the idea of borrowing $100,000 or more can certainly sound daunting. This feeling of being overwhelmed can often cause would-be borrowers to put off applying for a mortgage for yet another year. If this is you, it means just another year you will not be building equity in or enjoying your new home. It is natural to feel a bit overwhelmed, but make sure that this feeling does not stop you from moving forward and making it happen.

Tip #4: Learn about unique financing options: Did you know in many cases it is possible to borrow against your IRA without incurring any sort of early withdrawal penalties? This is a privilege that people buying their second or third home do not have. Also: many locales have their own first-time buyer programs that give substantial incentives for people in your situation. Make sure you know all of your options before making your decision.

Tip #5: If you get turned down, call at least 10 more lenders: Nobody likes to be rejected for a loan. But, if you are rejected the first time, call 10 more lenders. It is not the case that one size fits all and the situation of each lender is unique in terms of your eligibility. Also, contrary to popular belief, multiple credit report queries in a short span like 2-3 months from multiple mortgage lenders will not hurt your credit score.

Buying your first home should be an exciting, rewarding experience. By improving your credit score, being persistent in the process and educating yourself about your options, you could soon find yourself in the home of your dreams with a payment you can afford.

Anthony

Brian I Park asked:




If you have a bit of money or even no money at all for a deposit, risky credit and a lot of bills, the FHA mortgage could help you purchase your dream home.

The FHA or Federal Housing Administration, a vital part of the Housing and Urban Development, was founded 70 years ago to help FHA first time home buyer, particularly those individuals with low to middle income and minorities, obtain home mortgage they require.

The amount that you can have access to and the FHA will concur, has been significantly increased, letting more borrowers to benefit from these loans.

The new maximum value ranges from $271,050 for single family in not expensive locations to $729,750 in costly cities like San Francisco and New York. The maximum amounts are resolute by estimating 115% of a location’s middle home price.

That is consider a big improvement than that of the old limits which amounted to $200,160 to $362,790- a limitation that made the FHA mortgage insufficient all the way through the areas of California and parts of the Northeast.

As a first time buyer from FHA you might ask what you can benefit from them. Here’s a quick answer to this:

Benefit #1 – You are not required to provide a huge deposit and the lender get help you searching for it.

The FHA will ask from you to deposit at least 3%. Therefore that will cost to about $30 for every $1000 that you intend to borrow.

If you don’t have the amount, it will never be a problem. If can be a donation from your friends, a relative or an association that give financial aid.

The FHA is known to work with the local state programs that extend their help through deposit, closing costs and low interest rate mortgage. Your lender should be more willing to explain how these function.

Benefit #2- Your credit score does not have to be too ideal.

You credit rating is not really that important as the FHA do not make use of it to know if you qualify for a loan or not.

There are over 22 factors that go with computing your credit rating which includes how much credit you have, how much credit you normally utilize and how you apply for a credit. The FHA is not really concern on that issue when it comes to identifying whether you will get the mortgage or not.

Benefit #3- You can still acquire more debts.
The ratio of your debt-to-income can be significantly higher for a FHA mortgage that that of the traditional mortgage. And even the FHA boundaries have been extended to provide home ownership to a lot of individuals.

To know where you must stand, calculate your entire mortgage payments such as hazard insurance, interest, taxes, principal and mortgage insurance to your regular monthly responsibilities like auto loans, credit card debts, child support, and student loans. Then divide the total by the amount of your monthly gross income.

You can be eligible for the FHA mortgage even if it’s your first time to purchase a home provided that your monthly debt disbursements do not exceed 43% of your revenue.

Louise

Bryan Hendersen asked:


ow someone who is planning on buying a new home? First time homebuyers may qualify for a government grant that will help them make this big purchase. These grants are free money that can help future homeowners make a down payment on their new home or help them with the closing costs. The money received from these grants does not have to be paid back.

Different government agencies handle first time home buyer grant applications in different ways. Depending on the funds grated in your area, there are different amounts of money available. Search a current grant directory to find out what first time homebuyer grants are available to you. You can also research the process of submitting an application.

After you have been approved for this grant, you may get the money is just one week. Usually the money will be sent directly to you and other times it is credited to your mortgage. This grant is not dependant on a credit check and no collateral is needed, but you will need to prove your home offer has been accepted and that you have negotiated a mortgage. Sometimes the requirements do change, but this is the general process.

The actual terms of the grant also vary. Sometimes it is expected that you will have been the homeowner for at least three years. If you do not keep the home for three years, you might have to repay the grant. A grant directory will help you find the best grant for your particular situation.

Troy

Bryan Hendersen asked:


en patiently anticipated by many Americans and finally Obama’s first time stimulus plan has been unveiled. Now that it has become a reality, focus has turned to the housing industry. Real estate companies, lenders, politicians from both parties and potential homebuyers are all wondering how this plan will affect the future.

Outlined in this new law, Obama has paved the way for first time homebuyers to receive help in the form of an $8,000 tax credit that will minimize the burden created by purchasing a new home. The hope and purpose of this plan was to stimulate the real estate market, which has really been affected by the recent recession. It is hoped the First Time Home Buyer Stimulus Plan will give the economy a kick-start.

There are many benefits for homebuyers under this plan, especially those who were unsuccessful in previous attempts to purchase a home. The real estate industry will also benefit as people begin purchasing homes again.

The advantages are not limited to just the homebuyer and the lender, local businesses, who have previously suffered because of housing foreclosures, will also benefit. This plan has lead to optimism as people now hope the economy will rise up and some financial prosperity will return to their communities. With this in mind, and with the focus now on the stimulus plan, fears have been subsided and stress is being reduced.

It is possible that some aspects of this plan have not been considered. The First Time Home Buyer Stimulus Plan could have a negative affect on the housing market. People, who had no hope of buying a home prior to the introduction of the plan, are now able to purchase a family home.

However, what is going to happen when the lender decides to raise their rates? In the event of natural disasters like floods or tornadoes and these homeowners have to deal with insurance companies, remodelling costs and demand rebuilding loans how will all this be handled? The Americans that are excited about this stimulus plan should also be watching carefully for future mishaps that will eventually plaque the homeowners as well.

Clinton