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Be careful, these aren't as good as they seem. Although they do work for some people you've really gotta fit the bill. I investigated a similar one and ran into the following problems.
-if the gov backs it they inspect it and do alot of nit picking. Seems good for you except when a seller finds out all the hassels they'll have to through they don't want to sell to you.
-The one i looked into, no selling or refinancing for 10yrs or the US treasury gets a portion of the profits.
there were a few other controls that left me with a bad taste for it, but again for some people, it couldn't work out better.
Again it depends on the person and their perspective. Interest only loans do benefit IF you go at it with the right mind set. Your monthly payment is very low, so you have freedom at times of low income, but say you have some extra scratch. By sending checks to the principle you'll, in time, lower your payment. It works similar to a car loan.
Ultimately there are alot of programs out there, gotta find the one that fits you
Hi
I've worked in the non-profit end of the mortgage business for years. What you're describing is the NJ Home Mortgage Finance Agency's First Time Homebuyer mortgage. It is a low fixed rate, zero point mortgage. This loan isn't available to everyone, everywhere. It is for people making below 80% of median income and/or buying in targeted municipalities. Here's the link for the limitations http://www.state.nj.us/dca/hmfa/consu/buyers/ownprg/limits.html (broken link) The product is reputable and provided by a state agency. It used to sometimes run out of funding which could cause headaches when you went to close, but I haven't heard any complaints lately.
There are a lot of specialty products for people buying in targeted areas and/or those making below median income. Nearly every bank has a portfolio or CRA loan similar to the HMFA loan. You can go to a HUD approved housing counseling agency for help http://www.hud.gov/offices/hsg/sfh/h...searchstate=NJ
If you go it on your own ask questions about rate, term, points and apr. Ask for a mortgage using terms like CRA, portfolio, community development or first-time buyer. I always suggest people call at least three different lenders to compare before choosing. If you don't like the answers that you're getting then move on. There are a lot of lenders out there.
There is a "Recapture" rule it seems. It sounds like if you sell it within the first 9 years, the Treasury gets a portion of the proceeds . Can anyone provide more info on this? If you stay in the house for over 9 years, are you clear?
The recapture amount decreases by an annual percentage until it reaches zero in years 6-9. Anyone getting any type of mortgage needs to ask questions about the terms of the loan. Subsidized mortgages and most downpayment assistance using public money have recapture clauses.
Many people find that the rate reduction is offset by the increase in equity, but I really advise anyone who is buying a home for the first time to see a counselor. The NJHMFA program requires homebuyer education so it wouldn't hurt to start there.
The recapture amount decreases by an annual percentage until it reaches zero in years 6-9. Anyone getting any type of mortgage needs to ask questions about the terms of the loan. Subsidized mortgages and most downpayment assistance using public money have recapture clauses.
Many people find that the rate reduction is offset by the increase in equity, but I really advise anyone who is buying a home for the first time to see a counselor. The NJHMFA program requires homebuyer education so it wouldn't hurt to start there.
Be careful, these aren't as good as they seem. Although they do work for some people you've really gotta fit the bill. I investigated a similar one and ran into the following problems.
-if the gov backs it they inspect it and do alot of nit picking. Seems good for you except when a seller finds out all the hassels they'll have to through they don't want to sell to you.
-The one i looked into, no selling or refinancing for 10yrs or the US treasury gets a portion of the profits.
there were a few other controls that left me with a bad taste for it, but again for some people, it couldn't work out better.
Best of luck
These two concerns are not a big deal for current real estate market. First, many sellers are out there willing to sell you than holding two mortgages. Secondly, you can be guaranteed with 10 years you will NOT have too much of the profit on the house you buy, so do not worry too much of profit sharing to US government who helps you at the first place ...
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It's a mortgage from NJHMFA
