$8000 First Time Home Buyer Grant Demystified

If you’ve wondered what the exact requirements are regarding the $8000 first time home buyer grant, then you need to watch this weeks’ Real Estate Video Quick Tip with Mike Moulton. Mike discusses all of the requirements around the timings, definitions of a first time home buyer, repayment time frame for a sale, and income levels needed to take full advantage of the benefit.

Checkout the video below:

If you missed last weeks video, then click this text: You Need To Sell Your House Quickly But Don’t Have Time To Put It On The Market

Be sure to stay tuned for next weeks’ video.  If you are in the market for a home in the greater charlotte, NC area and need some assistance, call our office at 704-885-0488.

Take care,

Mike

Retweet this post

Buying Houses In High-End Real Estate Markets?

In 2002, James and Michelle Rigdon purchased a new $427,000 Gilroy, CA home with a conventional $282,500 first mortgage, a $25,000 deferred payment California Housing Finance Agency second, an $85,000 third from South (Santa Clara) County Housing, a $6,500 fourth from the Housing Trust of Santa Clara County and a $6,000 grant from a non-profit agency.

That’s what it’s come to in Silicon Valley, CA an area where single family home prices have fallen nearly $40,000 in recent months but the median price of homes remain higher than a half million dollars.

Instead of the traditional first and second mortgage to finance a home and cover the down payment, buyers are piling on more mortgages to acquire the American Dream.

“We can’t just get a first loan anymore. You have to go and find other loans. We spend a lot of time trying to guide people to the right place so they can get first, seconds, thirds and fourths,” said Tracy Cunningham, the Single-Family Program Manager for the Housing Trust of Santa Clara County.

But it’s not just California. New England, some Northeast metros, Denver and other areas have been socked with high home prices that often make creative financing with multiple loans the only way to buy.

“I’m not sure I’d advise someone in Boston that it is time to leave town, but I am certainly advising buyers to sit this market out. Boston has been through this real estate cycle before, and a lot of people will regret buying in the current real estate bubble,” said Bill Wendel, of the Real Estate Cafe in Lincoln, MA.

Others say, while real estate isn’t without its risks, that risk diminishes over time and buying, even in an expensive market, more often than not, makes sound financial sense.

The Office of Federal Housing Enterprise Oversight’s Second Quarter House Price Index says the nation’s housing market has enjoyed a nearly 39 percent rate of home price appreciation since 1997, with more the half the states and the District of Columbia enjoying a 5 percent growth in price appreciation during past year.

The federal overseer of Fannie Mae and Freddie Mac says any housing market downturn isn’t likely to fall as far as prices have risen and over time, banking on real estate is not a risky investment.

It’s just tough getting through the door in some areas and consumers need to give it a good hard shove to get it open.

“Call the housing department in your city. Many cities offer great deals for first-time home buyers. Zero-interest loans or loans with no payments or even loans that do not have to be repaid at all if you stay in the house for a time. Different programs are offered at different times depending on the funds available,” said Joette Joseph, branch manager of VP Alliance Title Co. in San Jose, CA.

Grants, for example, have been so overlooked, the national non-profit housing grant industry recently formed a trade group, the Homeownership Alliance of Nonprofit Downpayment Providers (HAND) to boost the visibility of grants that average $6,000 to $15,000 nationwide per home buyer.

“I’ve been talking to professors of urban affairs and almost no one has heard of this industry. It’s a five-year old industry and there are about 22 agencies. We are doing it with private capital. It is a gift to a buyer. The buyer doesn’t repay the money. That’s the main appeal,” said Jon Cottin, the new association’s executive director.

The same lack of knowledge often exists about special mortgages and loan programs available from city, county and state housing offices, as well as private agencies that don’t always have the budgets to advertise like private lenders.

“Find a loan broker who frequently works with first time buyers. They often have the inside scoop on whatever is currently available. There are many programs available if you do a little research. Be sure to get preapproved before you start shopping for a home,” said Joseph.

Many lenders participate in the federal Mortgage Credit Certificate (MCC) program typically administered on the county level in most states.

With an MCC, up to 20 percent of the annual mortgage interest paid to the lender is refunded to the home owner as a federal tax credit. Homeowners who paid $10,000 in interest, for example, would receive a tax credit of $2,000. The remaining 80 percent of the interest — $8,000 — is taken as a typical mortgage interest deduction.

Because the program offers a tax credit that is subtracted from taxes due (rather than a deduction the reduces your taxable income) home owners can see the benefit immediately by adjusting their W-4′s exemption status. Or home owners can add the $125 a month to cash available for a mortgage payment. In many cases, lenders will qualify borrowers based on the extra monthly cash flow, enabling them to qualify for a home that might have been out of their reach without the MCC.

Along with grants, government assistance, MCCs and private lender programs, builders also offer special financial keys to home ownership.

Some jurisdictions mandate a below market rate housing program that requires builders, in some cases, to set aside a small portion of newly developed homes for low and moderate-income households. Builders can meet the requirements with lowered sale prices, special loan assistance and by other means.

Savvy brokers and lenders can help steer borrowers to all these special programs, but it’s often up to the borrower to seek out the programs. Finding one program often leads borrowers to others.

“Don’t be afraid to have your buyer agent call a builder directly and ask for a deal. Sometimes builders have remnant lots which they will sell at a bargain. Sometimes they will build a house on a ‘cheap’ lot and sell it for a discount from the normal price in that neighborhood. Maybe the lot has a drainage easement or some other weakness that has made it be the last house in a built out subdivision, but you get the deal because you asked,” said Dane Hahn, broker-owner of Exit 11 Real Estate in Stratham, NH.

by Broderick Perkins
RealtyTimes

Retweet this post

Things You Need to Know to Pass Your Home Inspection

Nearly all buyers will hire a professional home inspector to take a closer look at their new home before closing. In some cases home inspections are done before the home goes under contract.

A home inspection covers several areas and systems within the house, but there are a few that actually worry buyers the most…. Will the roof end up leaking? Is the wiring safe? What about the plumbing? These, and others, are the questions that the buyers looking at your home will seek professional help to answer.

It is important to not wait until inspection day to assess the condition of your home and make necessary home repairs before you sell. Small problems can turn into major issues which could end up costing more in the end and possibly lower your homes value.

In most cases, you can make a reasonable pre-inspection yourself if you know what you’re looking for.

Here are some of the most common items to consider when preparing for your home inspection:

  1. Mold and Mildew
    Mildew stains and odors scare buyers, especially now that toxic black mold is such a hot topic. Chances are you won’t even get an acceptable offer if mold and mildew are present. Even if the mold in your house is the normal variety and not stachybotrys chartarum, it is important that you take care of it immediately. Kill the mold and mildew and fix the source of the problem.
  2. Defective Plumbing
    Defective plumbing can manifest itself in two different ways: leaking, and clogging. A visual inspection can detect leaking, and the inspector will check water pressure by turning on multiple faucets and flushing toilets at the same time. Appliances such as dishwashers and clothes washers may be tested, too. Leaks and clogs will be apparent during these checks. When checking the faucets if the water appears dirty when first turned on, this is a good indication that the pipes are rusting, which can result in severe water quality problems.

    The home inspector may also check the septic system. During one method dyes are flushed and the inspector waits to see if the dye surfaces on the drainfield, indicating a drainage problem.

  3. Damp or Wet Basement or Crawlspaces
    An inspector will check your walls for a powdery white mineral deposit a few inches off the floor, and will look to see if you feel secure enough to store things right on your basement floor. A mildew odor is almost impossible to eliminate, and an inspector will certainly be conscious of it.  The inspector might use a meter to determine how much moisture is present in these spaces, because moisture deteriorates building materials and attracts insects.

    It could cost you a few hundred dollars or several thousand, depending on the problem. You will have to weigh these figures into the calculation of what price you want to net on your home.

  4. Inadequate Wiring & Electrical
    The electrical panel and circuit breaker configuration should be adequate for the needs of the house. A 125 amp electrical panel works for most homes. Individual circuits should not be overloaded. Wire should be copper or aluminum.

    The inspector will look for receptacles with ground fault circuit interrupters (GFI) in bathrooms and kitchens. These receptacles have little test-reset buttons on them. The home inspector will likely make sure the receptacles are what they appear to be, and not “dummies” that aren’t wired to work. Some of the grounded receptacles (with 3-pronged plugs) will be checked too.

  5. Poor Heating & Cooling Systems
    Insufficient insulation, and an inadequate or a poorly functioning heating system, are the most common causes of poor heating. While an adequately clean furnace, without rust on the heat exchanger, usually has life left in it, an inspector will be asking and checking to see if your furnace is over its typical life span of 15-25 yrs. For a forced air gas system, a heat exchanger will come under particular scrutiny since one that is cracked can emit deadly carbon monoxide into the home. These heat exchangers must be replaced if damaged – they cannot be repaired.
  6. Roofing Problems
    Water leakage through the roof can occur for a variety of reasons such as physical deterioration of the asphalt shingles (e.g. curling or splitting), or mechanical damage from a wind storm. When gutters leak and downspouts allow water to run down and through the exterior walls, this external problem becomes a major internal one.
  7. Damp Attic Spaces
    Aside from basement dampness, problems with ventilation, insulation and vapor barriers can cause water, moisture, mold and mildew to form in the attic. This can lead to premature wear of the roof, structure and building materials. The cost to fix this damage could easily run over $2,500.
  8. Rotting Wood
    This can occur in many places (door or window frames, trim, siding, decks and fences). The building inspector will sometimes probe the wood to see if this is present – especially when wood has been freshly painted.
  9. Masonry Work
    Re-bricking can be costly, but, left unattended, these repairs can cause problems with water and moisture penetration into the home which in turn could lead to a chimney being clogged by fallen bricks or even a chimney which falls onto the roof. It can be costly to rebuild a chimney or to have it repainted.
  10. Unsafe or Over-fused Electrical Circuit
    A fire hazard is created when more amperage is drawn on the circuit than was intended. 15 amp circuits are the most common in a typical home, with larger service for large appliances such as stoves and dryers. It can cost several hundred dollars to replace your fuse panel with a circuit panel.
  11. Adequate Security Features
    More than a purchased security system, an inspector will look for the basic safety features that will protect your home such as proper locks on windows and patio doors, dead bolts on the doors, smoke and even carbon monoxide detectors in every bedroom and on every level. Even though pricing will vary, these components will add to your costs. Before purchasing or installing, you should check with your local experts.
  12. Structural/Foundation Problems
    An inspector will certainly investigate the underlying footing and foundation of your home as structural integrity is fundamental to your home.

When you put your home on the market, you don’t want any unpleasant surprises that could cost you the sale of your home. By having an understanding of these problem areas as you walk through your home, you’ll be preparing yourself against potential problems in the selling process.

Before the Inspection
Do everything you can to get the house in good condition before you attempt to sell it, but don’t be discouraged if the inspection report contains negative statements. Home inspectors make note of everything they see. No home is perfect.

Remember that the home inspection report is not a wish-list for buyers. Read your contract carefully–it probably states which systems should be in good working order at closing. For instance, if the roof is older, but doesn’t leak, it is in good working order. If there’s a leak, and fixing just the leak is possible, the roof will be in good working order.

Your contract may also state that you are under no obligation to make any repairs at all–although the buyers can then likely withdraw from the contract. Don’t feel you must comply with unreasonable demands for repairs.

Michael T. Moulton

Broker-In-Charge/Investor/Realtor

Bee Home Solutions, Inc.

The Creative Realty Firm.

Phone: 704-885-0488

Fax: 704-896-2802

Visit us on the web: www.BeeHomeSolutions.com

Retweet this post

First Time Homebuyer $8000 Tax Credit

real_estate1Due to The American Recovery and Reinvestment Act of 2009 the government has granted new home buyers an $8000 tax credit. What differs from this program versus others in the past is that this one does not have to be paid back in any way.  See all the of the details of the program here below and make sure that you call our office today to get started on finding your home for you in the greater Charlotte, NC area at 704-885-0488:

First Time Homebuyer Tax Credit

Take care and happy house hunting,

Mike

Retweet this post