first time home buyer – owner loan

Carrie Reeder asked:




Having bad credit will greatly affect your credit applications, especially if you have filed bankruptcy. If you have previously owned a home, and maintained a good payment history, lenders may give you a loan following a bankruptcy. However, if you are a first time homebuyer, expect lenders to be leery.

Loan Options for First Time Homebuyers

First time home buyers have several loan options. There are loan programs that offer down payment assistance, closing costs assistance, and low interest rates. These amazing benefits are designed to help you obtain a loan. Of course, to qualify for most first time home buying loans, you must have good or fair credit. Mortgage companies have specific guidelines. If you have a recent or past bankruptcy, your loan options will differ from an individual with good credit.

Increase Your Chances of Getting a Home Loan after Bankruptcy

Attempt to open new credit accounts immediately following a bankruptcy. When applying for a mortgage, lenders need to see some signs of credit improvement. Thus, you should wait at least one year before applying for mortgage loans. While a wait time of two years is recommended, if your credit improves significantly within a year, lenders may give you a home loan with acceptable terms.

During the period of rebuilding and increasing your credit score, keep credit accounts current. Defaulting on loans or receiving charge-offs following a bankruptcy is bad. In this situation, getting a home loan is practically impossible. While sub prime and high risk lenders are dedicated to offering bad credit mortgages, they will not give you a loan if you continue to be irresponsible in regards to credit.

Purchase Your First Home with a Down Payment

Applying for a mortgage loan with a down payment is recommended for first time homebuyers with a bankruptcy on their credit report. Saving for a down payment is difficult. However, it will raise your chances of receiving a good deal. Establish a budget. Lenders do not require large down payments. The average down payment for a home is about 3%.

Traditional Mortgage Lenders vs. Sub Prime Lenders

Moreover, apply for loans through lenders that work with bad credit and bankrupt applications. Do not waste your time by submitting applications through banks or mortgage companies. While these lenders may offer non-conventional loans, the interest rate is extremely high.

Instead, apply for mortgage loans through sub prime lenders. Sub prime lenders offer loans to individuals with low credit scores, bankruptcies, and no credit. The rates and fees for these loans are affordable. Do your research and obtain quotes from three or four lenders. Compare their offers, and choose the mortgage lender with the most attractive terms.

Kristen

ChevyChaseLiving asked:

Mr. & Mrs. Jones share their experience as first-time home buyers working with Melinda Estridge of The Estridge Group.

Jessie

REMarketingThisWeek asked:

$8000 Tax Credit for First Time Home Buyers with Low Down Payment. Lender Finance Program with Low Payment and Fixed Interest Rate on FHA Mortgage and Government Assistance. Go To RealEstateMarketingThisWeek.com Part 8 (Excerpt) Analyzing tax returns for self employed and small business owners; Use a Mortgage Planning Expert Credit scores now are a major factor with interest rates. You see the liars up on the internet with interest rates being at 4.625% and all this kind of hocus pocus, its not true. You are never going to qualify for that rate today. They are going to lie to you, once you sign and see the fine print you are going to realize that it is a ridiculous idea to pay that amount of money in fees. Credit scores have to be significantly higher than they used to, but again I have to tell you, its my opinions that a 70% no doc loan with someone who has a 720 or higher credit score I believe is a good loan. I personally believe that at some point it will be brought back. I am not arguing with that, with a good FICO score I can agree with a 20% down for a stated income loan. People are encouraged through our tax system to write off all of their expenses and so often we have small business people who really are making money but because they take advantage of our tax system they are not able to get a loan. They cant qualify based upon their income. In a lot of cases yes, but once again I definitely want to point his out just because someone is self employed and owns a …

Rebecca

RealEstateAtlanta101 asked:

CITY,OF,ATLANTA,GA,GEORGIA,HOMES,PROPERTY,REAL,ESTATE,FOR,SALE,FHA,HUD,GOVERNMENT,FORECLOSURES,SHORT,SALE,REALTOR,AGENT,FUNNY,ENTERTAINMENT,EDUCATIONAL,OFFICIAL,30315

Jonathan

rerockstar asked:

Video answering the questions “How do I file for the First Time Home Buyer Tax Credit?” and “Can I use the First Time Home Buyer Tax Credit as a down payment?” In posting quite frequently about the tax credit, I had noticed that there were still many questions out there, so I thought these two answers might help many buyers thinking of purchasing a home in San Antonio (and elsewhere) and wondering about the tax credit.

Courtney

Nick Piscitelli asked:




Well, the market is all abuzz over the Housing and Economic Recovery Act of 2008’s new $7,500 Federal Tax Credit for First Time Home Buyers. And well it should be! Right now, buyers should be out there buying! Rates are low, there is an excessive amount of inventory to choose from, and with this new tax credit it is clear that the time to act is NOW! But everyone seems to have a different idea about what this credit is all about. I’ve written this article to highlight this new tax credit and shed some light on exactly what the benefits are to the First Time Home Buyer who takes advantage of this credit. Below are the most common questions I am asked regarding the new credit, along with an easy to understand answer.

Who is eligible for this credit?

The $7,500 credit is available to first time home buyers only (a first time home buyer is defined as a buyer who has not owned a home during the past three years.) If you are a U.S. citizen, file taxes, and fit the definition of the first time home buyer, you are eligible to participate!

Are there any income limitations?

Yes. For a single individual (or head-of-household) the modified adjusted gross income (MAGI) must be less than $75,000. For a married couples filing a joint income tax return, the income limit is $150,000.

Single or head-of-household taxpayers making between $75,000 and $95,000 are eligible for a partial first-time home buyer tax credit. Married couples making between $150,000 and $170,000 are eligible for a partial first time home buyer tax credit.

What if I pay less than $7,500 in income taxes? Do I lose some of my credit?

No! The tax credit is refundable, meaning that if you pay less than $7,500 in taxes, the government will write you a check for the difference! As an example, if you owed $6,000 in federal income taxes, you would pay NOTHING and receive a check for $1,500 from the government. Another great example would be if you are due to receive a refund of $2,000 from the government. That refund would grow to $9,500 (the $2,000 original refund amount PLUS the $7,500 tax credit!)

What are the effective dates?

You must purchase a home after April 9, 2008 and before July 1, 2009. The home buyer must actually make settlement on the home during this time period.

What types of homes qualify for the tax credit?

Single family homes, townhomes, and condominiums all qualify, assuming that the home will be used as the primary residence and the buyer hasn’t owned a home in the prior three years.

Do I have to pay back this credit?

Yes, the credit is basically an interest free loan which will be repaid over 15 years. If you receive the whole $7,500 credit, you will pay it back at $500 per year for 15 years. A nice feature, though, is that the buyer doesn’t start repaying the credit until two years after the year in which they claimed the credit.

What if I sell the home in less than 15 years, before the credit is paid off?

The remaining balance would be due from the profit of the sale of the home. If you don’t earn enough profit on the sale, the balance of the credit payback would be forgiven.

So what are you waiting for? Even when the market is down, home prices will still appreciate more than the stock market! It’s time to get out there and buy the home of your dreams!! Contact your favorite local Realtor and get out there now!

Jean

REMarketingThisWeek asked:

Tax Credit for First Time Home Buyer Mortgage and Government Assistance Program to Help Home Owners Finance a Real Estate Loan with Low Down Payment and Interest Rate. Go To RealEstateMarketingThisWeek.com Part 5 (Excerpt) Inventory of foreclosed homes may be declining soon Home sales double in last year So we are back in studio today with Dan Havey. Dan and I have known each other for many years and we have worked very close over the years in real estate. Dan and I are not necessarily 100% in agreement with where the market is today and whether we are at the bottom or not. I tend to believe that we are. Let me tell you my thinking on this. Dan uses actual facts and figures to make his prognostications. Heres what I know, I know that Fannie Mae and Freddie Mac have put a moratorium on foreclosures. What that means is that they are slowing the supply of repos. What that means is that they are putting fewer homes on the market, which means the supply has been reduced to a 9 month supply of resale homes on the market. The builders are gearing up, getting ready to start building again, but they are not building again just yet. Thats a great indicator. Interest rates couldnt be better. They havent been better than they are now, so not only can you buy a house at the same price you would have paid for that house in 2002, but you are going to get a significantly lower interest rate then it would have been then. Effectively a house today is going to cost you less than it would in …

Susan

Bill Whitmire asked:




The purchasing of your own home has always been part of the American dream but home ownership is more difficult for some then it is for others. Fortunately there are loan programs which help those who might otherwise not be able to purchase their own homes. Many challenges can stand in the way of those families or couples desiring to purchase a home which will service as their primary residence. This article will look at the role of the FHA, VA State funded guarantee loan programs which bridge the gap for those who might otherwise be unable to purchase a home.

VA Loans

Those who have served in the military or armed forces and some qualifying surviving dependents can obtain low interest loans from the Veterans Administration. These loans are guaranteed by the US Department of Government Affairs and can be used for the purchasing of homes to be occupied as primary residences by individuals and families. Due to the fact that the income requirements and large down payments required to purchase a home were preventing veterans from purchasing homes the VA loan was established to help military personnel to access mortgage loans with better terms and conditions when purchasing a new home. A qualified VA lender can help military veterans and their families purchase their home without the need to come up with a large down payment.

State Funded Loans

Many states have programs which allow their residents to purchase homes at reduced interest rates and with a small or no down payment requirements. These programs which are often used in conjunction with federal loan programs make purchasing a home possible for those that would otherwise be unable to purchase a home for their family. Those wishing to participate in these loan programs must qualify based on income level and purchase a home within the price limits set down by the individual states. Some states only allow first time home buyers to participate in their programs, but as these programs vary from state to state it is best to check the state you will be applying to for more specific information.

FHA Loans

The Federal Housing Association also known as the FHA provides both mortgage insurance and training for prospective homeowners. Their programs are geared to address the needs of low income individuals, couples or families. FHA doesn’t directly loan the money to prospective homeowners but guarantees loans made by banks and other financial institutions. If a borrower cannot meet the lending institutions standards for large mortgage loans FHA guarantees the payment with insurance which will payoff the loan to the bank and the FHA will take possession of the property. This greatly reduces the risk to the lender. The institution that grants the loan services the loan during its term and reports statistical information back to the FHA.

Traditional mortgage loans used for the purchase of homes require borrowers to deposit up to 10% of the purchase price as a down payment. When borrowers are unable to do so FHA underwrites the loans for buyers who are able to afford the large down payment required by mortgage lenders as part of the purchase package. Until the FHA programs came about many couples and families desiring to purchase a home of their own were unable to do so because of the prohibitiveness of the large necessary down payment.

Another risk group for lenders are those whose credit-worthiness doesn’t meet the mortgage lenders standards. In this case FHA loans are used for these borrowers who do not meet standard credit approval. Credit for some can be a hard thing to establish thankfully today establishing credit has become much easier then in years past. If an individual has no credit or less then perfect credit programs such as the FHA program allow the banks to reduce the risk by underwriting the loans. Of course the amount of the loan that FHA is willing to underwrite is set down by guidelines and must be adhered to by lenders. Loan amounts that FHA is willing to underwrite can vary depending on the income level and purchase price of the property.

Jared

Lee Keadle asked:




Many buyers have been asking about the tax credit for home buyers coming up this tax year. Although this topic has gotten a lot of coverage in the news, people have gotten really confused about what it is. So, I wanted to clarify some of the misconceptions I’ve noticed when talking to home buyers.

The biggest misunderstanding about this tax credit is that every home buyer does not get it. This credit is only for first time home buyers. But, the good news is that the government usually defines people who haven’t owned a home in 3 years as first time buyers. So, you may not technically have to be buying your first home in order to qualify for this incentive.

Another misconception with this tax credit is that buyers think this credit is free money. Now, everyone knows there is no such thing as free money. The rule that “if it sounds too good to be true, it probably is” applies here. It’s important to note that this is actually a loan from the government to help first time buyers pay their taxes (since it’s assumed that this person will have incurred a lot of extra expenses in buying the home this past year). This tax credit is simply an incentive to help more people be able to buy these homes that are sitting on the market.

The way that it works is that this $7500 tax credit is repaid with your taxes every year at $500 a year. So, again, you will be paying this money back, but it will just be over a period of several years (similar to the loan on your home). But, unlike your home loan, this tax credit is an interest free loan. So, you’ll only be paying back that $7500.

When people realize they’re only postponing paying the inevitable tax money, they often ask if it’s really worth doing. After all, why not just pay it and get it over with? The answer depends on whether you need that money now to use for improvements to the house – such as putting carpet down, painting, or getting plumbing or electrical work done. If you’ve bought a house that is going to require some work early on, this tax credit may be worth it.

There have also been a lot of questions about the time frame the buyer purchased in order to qualify. We’ll be filing taxes in 2009 for the tax year of 2008. So, if you bought the home in 2008, you have the option to use this tax credit.

The last point I’ll mention is that this tax credit does not have anything to do with property taxes. Instead, it’s figured in with your income tax – which is confusing. For example, let’s say you file your 2008 returns and have a tax liability of $15,000 that your company withholds in wages. You would use your $7500 tax credit and pay only $7500 in your income tax. Or, if your company withheld $7500, you would use your tax credit of $7500 and would break even. In this last scenario, you would actually pay nothing this year in income taxes.

Be sure to talk to your CPA (or the person who does your tax work) about this tax credit if you think you may be eligible. Although there is a lot of information about this tax credit on the internet, it’s still important to get professional advice about taxes when filing tax returns. And, he or she should be able to answer any questions you have and give you an estimate as to how the credit will affect your income taxes this year.

Claudia

John Anghelache asked:




Shopping for your first home can be an exciting experience.

On the other hand, if you don’t know what you’re doing, it could be a costly experience that haunts you for years to come. In this brief article we’ll discuss some of the mistakes a first time home buyer is likely to make.

Mistake #1: Shopping For A Home The Wrong Way

With the advent of the Internet, a first time home buyer might think everything they need is online. That’s just not true. While the Internet does provide good information, there is no substitute for driving potential neighborhoods. Don’t rely on fancy pictures of houses. Or descriptions of property written by experienced sales agents. Instead, get in your car and drive around the areas you want to buy in. The best times to drive a neighborhood is between 5 pm and 7 pm. That’s when everyone is home and you get to see how the area and the people who live there really are.

Mistake #2: Working With The Wrong Agent

Real estate agents have one agenda: To sell houses. They make their money by bringing buyers and sellers together. Commission-hungry agents can sometimes overstate the merits of a house. You want to work with an agent who prefers to represent buyers. These types of agents – known as “Buyer’s Agents” – have a fiduciary responsibility to serve you the buyer. The seller’s agent works for the seller. By law, they can not be on your side. So make sure you get your own representation.

Mistake #3: Not Getting A Home Inspection

A professional home inspection can save you thousands of dollars. A first time home buyer I know decided to forego hiring a home inspection company. After closing on the deal a bunch of problems crept up. For instance: the shower drain caused a leak into an adjacent room. The furnace was so old it was spewing out carbon dioxide. These two problems alone – which could have been detected by a home inspector – cost over $5,000 to repair.

Mistake #5: Negotiating The Wrong Way

When it comes to getting the best deal on the market, you must know the seller’s situation. You will not get a steal from a seller who is not motivated. But a seller that is going through some hardship that requires they sell will be more likely to negotiate price and terms. The other factor to getting a great deal is knowing what kind of market you’re in. In a “buyer’s market” you’ll do well. In a “seller’s market” you probably won’t. So do your homework and find out the conditions in your market. Then, once you find a home you like, try to find out the seller’s situation before you negotiate. Otherwise, you might end up losing the house you fall in love with to someone else who did their homework.

There are a couple of other things to keep in mind. Financing is a key issue. Make sure you get pre-approved before looking for a house. Clean up your credit report before you see a lender to get the lowest rate possible. And remember: Start early in the process so you never feel pressured into anything.

Courtney