Getting a Mortgage

Below is a video of my interview with John Georgi of Home Loans as he explains the first steps of getting a mortgage and what you can expect.

First Time Home Buyer Tax Credit

President Obama made it official a few weeks ago when he signed the new stimulus bill….a tax refund for first time buyers of up to $8000 that YOU DON’T HAVE TO PAY BACK!

Here’s how it works…if you are a first time buyer (or anyone who hasn’t owned a home in the last three years, actually) you will qualify for a tax credit of 10% of the purchase price of your first home, up to $8000.

That’s right, I said tax CREDIT not tax deduction.  So, if you are normally entitled to a refund this will come straight back to you.  As long as you live in the home for 36 months you will not have to pay this money back.  This credit only applies to first time buyers who purchase a home between Jan. 1, 2009 and Dec. 1, 2009.

There are a few exceptions, such as if one spouse has owned a house before and the other has not, you will not qualify, etc.  So check with your tax accountant, but otherwise get out there and take advantage.

Photo Source: Tizzie’s Photo Stream

How Much Should I Put Down For My First Home Down Payment?

As you begin your search for Lansing real estate, you may have heard in the news, the mortgage industry has been turned on its head in the last year or so.  Gone are the days of 100% financing (with few exceptions).  Gone are the “stated income” loans and we are getting back to basics.

As you think about your first home purchase, financing can be one of the most confusing topics.  For first time home buyers there are still lots of loan options available.  The lowest down payment loan out there is called an FHA mortgage.  This is a loan that is insured by the government, thus banks are willing to loan a larger percentage of the value of the property.  Currently with this type of mortgage you will need a 3.5% down payment.  With an FHA mortgage when you make your monthly payment every month you are actually paying for five separate expenses: principal, interest, property taxes, home owners insurance, and mortgage insurance.

In order to avoid the cost of mortgage insurance every month you can choose to put down a 20% downpayment.  This is called a conventional loan.

So for you first home, if you can swing it, it is best to put down 20%.  For most people, however, this is just not realistic and they opt for the more affordable 3.5% downpayment.

Photo Source: American Mortgage Relieft Services