Great news for homebuyers! It appears the bill I posted below, on October 29, has passed with most of the same details listed in post below! Check out this link at http://www.msnbc.msn.com:80/id/33522046/ns/business-real_estate/ to read all about it!
HOME BUYER TAX CREDIT
FINGERS CROSSED!!!! There is a plan in the Senate to extend the current $8000 tax credit – AS WELL as some additional offerings! The primary points are as follows:
1. The plan would be to extend the credit, now ready to expire on November 30, 2009, to home purchases UNDER CONTRACT to April 30, 2010, with borrowers allowed another 60 DAYS to close the sale!
2. The plan would also allow homebuyers who buy a new home to qualify for a $6500 tax credit if they have lived in their PRIOR residence for at least 5 years! This would encourage existing homeowners to buy and sell!
3. The income levels would change, too, if this plan is approved. Currently, the income levels are up to $75,000 for individuals and up to $150,000 for couples. The proposal is for up to $125,000 for individuals and upt to $250,000 for couples!
This is AWESOME – and I hope it passes so that the real estate market will continue to stabilize!
To read the full article in Bloomberg, please CLICK HERE.
FINANCING FOR HOME BUYERS
There are several loan progams available for real estate home buyers, whether first-time home buyers or “skilled” home buyers, especially in Alabama, whether in Huntsville, AL; city of Madison, AL or Madison County, AL.
We are lucky here, in Alabama Real Estate, to have what is called the “Alabama Step Up Program”. It is the first down payment assistance program designed specifically for Alabama’s moderate-income home buyers. Step Up helps those whose incomes allow for a market-rate mortgage, but who do not have the savings for the amount needed for down payments, closing costs, etc. Alabama Step Up Program is assistance in the form of a monthly payment loan secured by a subordinated or junior lien placed on the purchased property. The income guideline for this program is $97,300 and the assistance covers 3% of the 3.5% downpayment requirement. The interest rate is slightly higher than the current market rate, but the down payment funds are blended into the home mortgage so the homeowner only has to write one check each month. Homebuyer Education IS required on this loan. The property can be located anywhere (rural, city, etc) and the buyer does NOT have to be a “first time home buyer”.
Rural Development is a 100% loan to a buyer, but the property MUST be located in what is deemed a “rural area” (your mortgage lender can check the address to verify it is, in fact, located in rural as sometimes a “city” address is still located in the county). This loan DOES have an income guideline; however, there is NO Private Mortgage Insurance (PMI) on this loan. Homebuyer Education IS required on Rural Development Loans.
For borrowers who need a minimum downpayment, but do not qualify for the assistance programs, there are FHA loans, which is a great loan program. The minimum downpayment is 3.5% of the sales price, and sellers can pay up to 6% of the closing costs, including prepaids and escrow items. There is NO income guideline on this program and Homebuyer Education is NOT required. FHA loans do have Mortgage Insurance Premiums added to the monthly payments and financed in the loan.
VA is a great program for Veterans, and in this area, we have a LOT of Military Relocation to Redstone Arsenal, AL (especially with the BRAC movement coming this way!). It is a 100% loan, but VA DOES charge a funding fee, which is financed into the loan. There is NO income guideline for this program and Homebuyer Education is NOT required.
Conventional Loans have a minimum downpayment requirement of 5%, but the borrower can put down more money if they choose. Private Mortgage Insurance (PMI) is added to the payment for a downpayment of less than 20%, and PMI can be costly. There are some ways to avoid PMI by obtaining a “home equity loan” to “make up” for the delta between the 5% down payment and the 20% required to avoid PMI. For these options, it is definitely best to contact your mortgage lender.
For other important home buyer tips, information including First Time Home Buyer’s Tax Credit, please visit my website at www.karenbordensells.com.
