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Archive for the ‘Financing/Mortgage/Lending’ Category

Fannie Mae has a program called HomePath, which offers subprime-era terms for buyers: minimal down payments, no appraisals, no mortgage insurance and lower minimum credit scores.

In some cases this is a GREAT deal for buyers, sometimes not. Nevertheless buyers should keep an eye out for these types of opportunities, not only as a personal residence but for rental properties too.

To view the full article from the LA Times: click here

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I just gave a speech on this topic, and actually, another way to say this is:

You can’t afford not to buy real estate right now.

I know this sounds like a sales pitch, and technically I am a salesperson, but being “salesy” is not my genetic makeup (that’s my wife – just don’t tell her I said that).

Seriously, there are three very good facts about why it makes sense to buy real estate RIGHT NOW.

First Time Home Buyers – Everyone has heard this right now, but if you are  first time home buyer, or you have not owned a home for less than 3 years, you can get $8,000 back from the IRS.  This is not a loan, this is an ACTUAL cash credit.   Why is this important:  the median sales price for a home in the Denver Metro area this yea is $195,000.  So the IRS is giving you 4% of the purchase price in cash to buy the house.  You only need 3 1/2% for a down payment, so essentially you can be getting a half a point back for buying your own home.  Need I say any more?

The other major factors to buy now are:

It always makes financial sense to MOVE UP in a down market.  So, you want that 3 car garage, or the house with a view, or the extra bed and bath for when you have visitors.  Whatever the reason, I will go through why this mathematically makes sense.

 Interest Rates affect your Purchasing Power, and interest rates are still at historic lows.  Every 1% change in interest rate fluctuation is equal to 10% purchasing power.  If the rates go up 1%, you just lost 10% of your purchasing power.

My next two posts will look into these two items in more detail

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Direct from the horse’s mouth: how you qualify and can receive the first time homebuyer credit.

http://www.irs.gov/newsroom/article/0,,id=206291,00.html

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The Federal Housing Administration (FHA) is working to monetize the $8,000 tax credit that is available to first time home buyers.

If they can figure out how to do this, new home buyers will be able to use that $8,000 NOW, when they purchase their home. Since a buyer needs 3 1/2 percent for down payment when using FHA loans, that $8,000 can be the 3.5% up to a $225,000 purchase.

Read details at: http://www.latimes.com/business/la-fi-harney24-2009may24,0,6944417.story

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There is lots written about the stimulus bill for homebuyers, but here is the recap:

Time frame to buy:  by Dec 1, 2009 – settlement date must be by 12/1/09

First-time buyer: a buyer who has not owned a home for three years.

Married first-time buyer:  both buyers have not owned a home for three years.

Claim tax credit – Claim the tax credit on your federal income tax return.

Other form or forms – No other form except your federal income tax return.

Credit limits – Single, $74k, Married $150k

Tax credit pay back – You are not required to repay except for certain conditions.

Access the tax credit now – Consider changing your withholding numbers.

Loan credit – State housing finance agencies to help buyers at closing by advancing the credit amount as a loan.

 

NOTE:  Buyers should speak with a tax advisor or other professionals.  I am not a tax authority, nor should the above statements be relied upon solely in making home purchasing decisions.

When combined with a HUD home purchase, new home buyers could get into a new home for $100!  I have seen many HUD homes in Centennial, Highlands Ranch, and Parker.

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