New House, First Time Buyer, Bank Loans (mortgage, credit)

[Mr. Krinkle]

Originally Posted by MissDaisy

30 year fixed (the only kind I would do) are generally now @ about 6.50.

If you are first time buyers, remember the new $7500.00 FTB Federal credit
(not REALLY a credit, but a 15 year interest free loan) but hey, that would sure help with closing costs!

Question, I was married when I bought my first house back in 2000 and we had a joint account. Now being divorced for 5 years, can I apply as a first time home owner if the is my first solo purchase.

[banker]

Originally Posted by vtowntom

Why "never go with 30 year payment plan"?

If going to a 30 year fixed makes the monthly mortgage payment more palatable for some folks, I say go for it. Also, let me tell you, if you bought in 2001 and sold recently, you experienced major appreciation, because of the market mostly. The market is not going to be like that again for awhile. So, yes, if you get a 15 year mortgage, more of your money is going to go towards principal. If you plan on staying in your home for more than 3-5 years, there's nothing wrong with a 30 year fixed mortgage.

Every person has a different idea of what their "ideal" monthly payment should be for a house. Yes, having a good debt to income ratio is key, but there are other things to think about when it comes to getting a mortgage. Do your homework first.

My appreciation averaged about 6% for the six and a half years I owned the home. The big difference was the 15-year mortgage.

[Supermac34]

With that amount of money going home, I wouldn't finance more than 200K. If you can put 20% down, that means you could purchase a $240,000 home. We used Network Funding and got our loan through Wells Fargo at 5.75% for 30 year fixed in December.

[marykate1]

Hi Supermax34,

Currently we are looking to put 3-5% down payment. What would you recommend?

[MissDaisy]

Originally Posted by Mr. Krinkle

Question, I was married when I bought my first house back in 2000 and we had a joint account. Now being divorced for 5 years, can I apply as a first time home owner if the is my first solo purchase.

Good News!! YES!!! The FTB credit defines a FTB as someone (or BOTH parties of a current marriage) as someone who has not owned a home in the past three years...

Who said there were no do-overs!!!

Again, this is good for all of us...not just FTB's, but the folks that FTB purchases help us current homeowners as well...like I said before, the circle of real estate love...

Maybe, at least until the credit expires, the law of gravity will shift and poo will for awhile roll uphill???

[marykate1]

Hi MissDaisy,

Where should we go to apply for the FTB credit? Also I am citizen but my husband is green card holder does that mean we qualify for this credit.

[MissDaisy]

Originally Posted by marykate1

Hi Supermax34,

Currently we are looking to put 3-5% down payment. What would you recommend?

Lenders these days, because of the obvious problems, are now pretty much stuck on a minimum of 5 % downpayment, which in the case of your 90k purchase estimate, really only changes your down from $2700 (3%) to $4500 (5%), plus closing costs of a shot in the dark (just doing the fractional math based on your 90k number vs the purchase of our home in Conroe 4/08) of $2500-ish.

But, marykate1, keep in mind, that in absence of the Fed FTB $$ (10% of the purchase price, up to $7500) in your case, 10% of $90k being $9000 =full credit of $7500...

Normal 3% down- $2700 plus $2500 closing cost estimate..= $5200 cash upfront..

FTB credit...5% down $4500 plus $2500 closing costs = $7000....less tax credit (on your Fed 1040) net net $500 back in your pocket! So clearly, the initial cash outlay is a temporary one til your 08 tax return is filed..Yay for you!

And while a 15 yr note may seem attractive, for many reasons..I am going under the assumption that you are young and just starting out..that being said you probably won't be in this home forever...it is a starting point,,,probably not your "dream house" but a spring board...that is what most (fiscally) prudent folks do...

Just FYI, I am not a mortgage banker, real estate salesperson, tax preparer, or anyone else who could stand to gain financially from your individual situation or transaction by one red cent...

I AM however, and have been, in the retail lending business for the last 28 years, know and understand how credit works, use that knowledge virtually every moment of every day...and have personal and investment real estate.

I am watching this stuff, probably even in my sleep....

[LJarrett]

You will get a form at tax time to receive the credit. So, you must purchase a home this year and when you are doing your taxes at the beginning of 2009, you will also fill out this form and file it. It is important to note that not everyone will get a fill $7500. The amount is dependent upon the price of the home and your annual income. Not sure how this works for green card holders. I would contact an accountant or mortgage professional. Also, at only a 3% required down payment, and FHA loan is a great way to go if you are a first-time homebuyer and the house is less than $271,050 in Harris County. Some counties in Texas have a $288,00 limit . The rates are at 6.5% and you have to have a 580 credit score. The down payment can be a gift, too. Also, it looks like you make too much, but keep in mind that if you are a first-time homebuyer, you may qualify for a bond program if the state has money available. This is one of the lowest rates a first-time buyer can get with very little money down. Also, the MCC (Mortgage Credit Certificate) credit is available when the state has money for it. I would recommend contacting a mortgage broker who is able to do bank loans, FHA, VA, bonds, etc. They can answer all your questions.
Good luck!

[chris_ut]

That tax credit is kinda pointless since u have to pay it back in installments over the next few years.

[LJarrett]

You start paying it back two years after you receive it. It isn't pointless because it is basically an interest-free loan from the government. Also, this is a way for the government to help stimulate the housing market since the house must be purchased this year.
Plus, as I understand it, if you purchase a house this year, sell it, and don't make enough off the sale to pay back the entire loan, the government will forgive the debt owed, even if you are in the house less than two years.