Thanks to the Missouri Housing Development Commission, if you can only afford a very small down-payment, you can still afford a home!
MHDC has a FIRST PLACE Loan, in which a buyer only needs .5% (that is 1/2%) to put as a down payment on a FHA loan. MHDC will pay the other 3% to cover your down-payment.
What are the requirements?
- You must be income eligible. In St. Louis, that means you cannot make over $67,900 for a 1-2 person household.
- Purchase price must be under $258,690 in a non-targeted area and $316,177 in a targeted area. (Contact your lender to find out what targeted areas are.)
- You must occupy the home within 60 days of closing. (No rental Properties here)
- You must live in the house for 5 years in order for the 3% loan to be paid off. In other words, if you don't live in the home for 5 years, you will have to repay the 3% to MHDC.
- The interest rate is automatically 5.625%. No exceptions. This was set by MHDC, not by lenders.
This is a great option for first time home buyers. You will still receive the $8,000 tax credit. So, if you choose to go this route, and you are planning on staying in a home for 5+ years, the government is going to give you $11,000.
Monday, February 22, 2010
Thursday, February 18, 2010
Tax Credit Information
First Time Homebuyer Tax Credit:
If you haven't owned a home in the last 3 years, you may be eligible for this tax credit. This credit is for 10% of the purchase price of the home, with a maximum value of $8,000. Single taxpayers and married couples filling a joint tax return may qualify for the full tax credit amount.
Current Homeowner Tax Credit:
If you already own a residence, you are eligible for a tax credit. This incentive is worth up to $6,500 for qualified buyers who have owned and occupied a primary residence for a period of 5 consecutive years during the last 8 years. Single taxpayers and married couples filling a joint return may qualify for the full tax credit amount.
What are the new deadlines?
In order to qualify for the credit, you must sign a contract no later than April 30th, 2010.
You must close by June 30th, 2010. Those in the military do have special extensions on the time lines available.
If you haven't owned a home in the last 3 years, you may be eligible for this tax credit. This credit is for 10% of the purchase price of the home, with a maximum value of $8,000. Single taxpayers and married couples filling a joint tax return may qualify for the full tax credit amount.
Current Homeowner Tax Credit:
If you already own a residence, you are eligible for a tax credit. This incentive is worth up to $6,500 for qualified buyers who have owned and occupied a primary residence for a period of 5 consecutive years during the last 8 years. Single taxpayers and married couples filling a joint return may qualify for the full tax credit amount.
What are the new deadlines?
In order to qualify for the credit, you must sign a contract no later than April 30th, 2010.
You must close by June 30th, 2010. Those in the military do have special extensions on the time lines available.
Wednesday, February 10, 2010
FICO SCORE
Question: I've been told that too many lenders checking my FICO score can actually hurt my score. I am not clear on how I am supposed to comparison shop without causing my score to drop. What should I do?
Answer: Go ahead and shop for loans. You want to make sure you are being well taken care of by your lender. Just make sure that you do your shopping within a 2 week period. Lenders don't like to see that you have a lot of inquiries because that may mean that you are going to pile on a lot of debt. This is risky for lenders. This is not the case. You aren't applying for a lot of mortgages; you are applying for one. People in the financial industry can appreciate you being responsible and shopping around. The people at Fair Isaac have created a way for you to shop without affecting your credit score. Do all of your shopping within 2 weeks.
Answer: Go ahead and shop for loans. You want to make sure you are being well taken care of by your lender. Just make sure that you do your shopping within a 2 week period. Lenders don't like to see that you have a lot of inquiries because that may mean that you are going to pile on a lot of debt. This is risky for lenders. This is not the case. You aren't applying for a lot of mortgages; you are applying for one. People in the financial industry can appreciate you being responsible and shopping around. The people at Fair Isaac have created a way for you to shop without affecting your credit score. Do all of your shopping within 2 weeks.
Monday, February 8, 2010
Tips for First Time Home Buyers
Tips for First Time Home Buyers
1. Be choosy, but realistic.
You may never find the perfect home.
2. Do your homework before looking at homes.
Determine exactly what features you want in a home and which are most important to you.
3. Get your finances in order.
Examine your credit report & be prepared for down payment or closing cost.
4. Get pre-approved for a mortgage.
Talk to a lender NOW - before engaging a realtor.
5. Know your move-in date.
When does your lease end?
Are you allowed to sublet?
How tight is the rental market in your area?
6. Think long-term.
Are you looking for a starter home, or something to stay in for a long time?
This could influence the type of home you decide to purchase, as well as the type of mortgage
terms that might be best for you.
7. Don't become "house poor".
Buying the biggest home you can afford may leave no money for maintenance, decor, or
renovations. Plus, it may make it hard for you to save money for other financial goals.
8. Don't take chances.
Obtain a professional home inspection and, if possible, a warranty from the seller to cover any
defect within the first year.
(Information from this article came from RealEstateBook.com)
1. Be choosy, but realistic.
You may never find the perfect home.
2. Do your homework before looking at homes.
Determine exactly what features you want in a home and which are most important to you.
3. Get your finances in order.
Examine your credit report & be prepared for down payment or closing cost.
4. Get pre-approved for a mortgage.
Talk to a lender NOW - before engaging a realtor.
5. Know your move-in date.
When does your lease end?
Are you allowed to sublet?
How tight is the rental market in your area?
6. Think long-term.
Are you looking for a starter home, or something to stay in for a long time?
This could influence the type of home you decide to purchase, as well as the type of mortgage
terms that might be best for you.
7. Don't become "house poor".
Buying the biggest home you can afford may leave no money for maintenance, decor, or
renovations. Plus, it may make it hard for you to save money for other financial goals.
8. Don't take chances.
Obtain a professional home inspection and, if possible, a warranty from the seller to cover any
defect within the first year.
(Information from this article came from RealEstateBook.com)
Tuesday, February 2, 2010
What is an assumable loan?
What is an Assumable loan?
An Assumable Loan is a loan that can be transferred from the seller of a property to the buyer of a property.
For example: I am selling a home for $150,000, and I have an interest rate of 4.5% with a balance of $120,000. I am advertising the fact that I have an assumable loan. This means that as long as the buyer can pay the $30,000, they can assume the loan that I have on my home.
This would be a good option for the buyer if rates are increasing (or at least if rates are above 4.5%)
This is a good way for people to advertise when they are selling their home in a market where interest rates are high.
For people that are buying homes right now, this could be a great marketing option if you are selling your home in the future. Most likely, the housing market will rebound and rates will increase. Right now is a great time to buy a home! Rates are low, and the federal government is offering money to First Time Home Buyers AND Buyers that are trying to get a bigger or better home!
An Assumable Loan is a loan that can be transferred from the seller of a property to the buyer of a property.
For example: I am selling a home for $150,000, and I have an interest rate of 4.5% with a balance of $120,000. I am advertising the fact that I have an assumable loan. This means that as long as the buyer can pay the $30,000, they can assume the loan that I have on my home.
This would be a good option for the buyer if rates are increasing (or at least if rates are above 4.5%)
This is a good way for people to advertise when they are selling their home in a market where interest rates are high.
For people that are buying homes right now, this could be a great marketing option if you are selling your home in the future. Most likely, the housing market will rebound and rates will increase. Right now is a great time to buy a home! Rates are low, and the federal government is offering money to First Time Home Buyers AND Buyers that are trying to get a bigger or better home!
Monday, February 1, 2010
What is the Truth in Lending Disclosure?
When you are closing on your home, your lender will give you a Truth In Lending Disclosure(TIL).
What is in a TIL?
1.Your annual percentage rate (APR) is shown in your interest rate. This is your rate as a year, not monthly.
2. It will also show you what you will pay if you never prepay on a loan. So, you could have a loan amount of $168,567.28 for a 30 year term. What you will actually pay on this loan (assuming you do not prepay) is $317,136.06. That is a BIG difference.
3. It will show you the amount of payments you are responsible for.
4. It tells you if you are able to prepay on your loan (always a good idea because when you prepay, you are paying down your principle.)
5. It tells you if your loan is assumable.
6. It will tell you what your prepaid interest is (because when you close on a loan, you do not pay the first month's payment.)
7. It tells you what your home owner's insurance (hazard insurance) payment is.
8. It tells you what your county property taxes are.
9. It gives you the adjustment (what the lender owes you if they over disclosed on costs).
Always ask your lender to explain these items before signing. In order to properly manage your loan, it is important to know the details of it. Make sure you are educating yourself by asking your lender questions. Your loan officer should never be too busy to answer your questions.
What is in a TIL?
1.Your annual percentage rate (APR) is shown in your interest rate. This is your rate as a year, not monthly.
2. It will also show you what you will pay if you never prepay on a loan. So, you could have a loan amount of $168,567.28 for a 30 year term. What you will actually pay on this loan (assuming you do not prepay) is $317,136.06. That is a BIG difference.
3. It will show you the amount of payments you are responsible for.
4. It tells you if you are able to prepay on your loan (always a good idea because when you prepay, you are paying down your principle.)
5. It tells you if your loan is assumable.
6. It will tell you what your prepaid interest is (because when you close on a loan, you do not pay the first month's payment.)
7. It tells you what your home owner's insurance (hazard insurance) payment is.
8. It tells you what your county property taxes are.
9. It gives you the adjustment (what the lender owes you if they over disclosed on costs).
Always ask your lender to explain these items before signing. In order to properly manage your loan, it is important to know the details of it. Make sure you are educating yourself by asking your lender questions. Your loan officer should never be too busy to answer your questions.
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