Information for First Time Buyers, Part II: It’s All About The Money

In this second installment of Information for First Time Home Buyers will deal primarily with one of the biggest concerns people have; the money. In the first part of this series, I went over some of the financial benefits of purchasing a home in today’s market such as seller contributions and instant equity, but what may be the number one concern that holds people back from making that smart purchase is all about the loan. How much house can they qualify for, concerns about credit history and questions about interest rates are all issues home buyers are often struggling with. This blog will hopefully shed some light on these concerns and help you better understand the financial side of the home buying process.

If I had a dollar for every time a person told me, “There’s just no way I would ever qualify for a loan.” I think I could retire and sip on Mai Tai’s with little pink umbrellas all day, everyday for the rest of my life. With headlines blazing, “Credit Crunch” and “Mortgage Meltdown”, it is understandable that people are afraid of even seeing what possibilities are out there. The truth is, there are loan programs available that can help you get a great home. All you need is a good, responsible loan officer to get you the best loan, and a good REALTOR® (that would be me!) to find you the home that matches your needs while agreeing with your budget.

I need to start by saying that I am NOT a loan officer. To get into specifics about your individual situation, please contact me and I can get you in touch with some of the finest, most honest, and responsible loan officers that are in the Las Vegas / Henderson area. I am also not a financial advisor nor a tax accountant, so please consult professionals in these areas to get into specifics. I am just going to go over some great opportunities that are out there to get you pointed in the right direction, which is a direction based on sound educated information, and not just sensationalized headlines.

Since 1934, the Federal Housing Administration (FHA) has been insuring loans for home buyers so that lenders can give you the best deal possible. FHA Loans have fewer credit restrictions, lower down payment requirements and fewer closing costs required by the buyer to pay than conventional loans.

There are a number of ways that you can get approved for an FHA loan. They can look at your credit score along with income statements, or what is often not known among home buyers whose credit score isn’t all that great, they can look at Alternative Sources of Credit such as tax returns, income statements, bill payment history, and rental history to get you approved. This is such an incredible tool for people that have had some “credit misfortune” whether it is some bill collection or bankruptcy that may have brought that score down. We all have slip ups…it’s okay. There are ways to get to the place you want to be, all you have to do is ask.

FHA is coming back strong in Las Vegas and Henderson, NV as well as the rest of the country because in March, FHA raised the limits on loans that people can get. Where the highest FHA loan in Las Vegas / Henderson, NV you could get was $304,000, the loan limit has now been raised to $400,000! This opens up a whole new market for people looking for their home.

FHA also offers one the most attractive down payment requirements out there; 3% of the sales price. For a long time, the money of this 3% down payment needed to either be your own money or a gift from a relative, employer or charitable organization. There is a relatively new kid on the block, however, that is particularly attractive for the current market conditions called the Nehemiah Down Payment Assistance Program.

Without getting into too much detail, Nehemiah is used to get up to 6% of the sales price from the seller. 3% of this gift pays for your FHA down payment, and the remaining 3% will go towards paying your closing costs. Now…will all sellers automatically agree to the Nehemiah terms? No, but in today’s market, sellers know that they need to do some bending to get deals done, which is an incredible benefit to you, the buyer.

So…I basically just told you that you can get a government insured loan for up to $400,000, without too strict credit requirements, and all for virtually no money out of pocket. Oh, and did I mention that this loan is a 30 year fixed rate loan where you would be paying your full Principal, Interest, Taxes, and Insurance (P.I.T.I)? Sounds too good to be true in the land of “credit crunches” and “mortgage meltodowns?” Like I said before, all you have to do is ask. This program is out there, it is real, and it is, and has been assisting home buyers reach their dreams. Contact me so I can connect you with a qualified lender with good FHA experience. As I have been saying time and time again, now is the time to buy. What I just laid out before you are the tools that can help you be able to make that smart buy.

The last item I wanted to cover in this second section of the three part series concerns the tax benefits of home ownership. Again, I am not a tax accountant or attorney, so please consult with a professional when it comes to tax advice. I just wanted to highlight something that is commonly heard, but is sometimes unclear to the first time home buyer, and that would be the tax benefits of home ownership.

In short, the tax benefit for home owners means that if you own a home, you no longer have to pay taxes!

Just kidding! Ok…come on…I needed at least one April Fools joke in this blog written on April 1. Wouldn’t that be nice though?

In all seriousness now, the tax benefit of home ownership is that you can write off the interest that you pay on a mortgage or home equity line of credit (HELOC). With a 30 year fixed loan where you pay the Principal and Interest as part of your payment, most your monthly payment is actually interest in the beginning years, so you will have a good deal of help in writing those taxes down the first few years you own a home. Outside of that, I suggest you contact your tax professional for more specific advice. This tax write off is a significant savings though, and one that can not be realized through a rental payment.

Thank you for joining me for this installment for First Time Home Buyers…well…really for all buyers. The next and final installment of this series will cover some general concerns people have about the home buying process and the services that I will provide to you (for free, by the way) as your REALTOR®.

If you know someone that might even be the least bit interested in home ownership, please let them know about my blog or pass along my contact information so I can talk with them directly. There are some truly great things out there for home buyers in the Las Vegas / Henderson, NV Real Estate Market, it’s time to get the word out! If you have any questions about material contained in this blog, or anything about the local real estate scene, please do not hesitate to contact me at 702-370-3521 or e-mail me at mike@PrimeRealEstateLasVegas.com. Also, check out my website at http://www.PrimeRealEstateLasVegas.com for up to date news and other information.

Tags: buying a home, fha, henderson, henderson homes, henderson real estate, henderson realtor, home loans, homes for sale, las vegas, las vegas homes, las vegas real estate, las vegas realtor, mike dobranski, mortgages, nehemiah, prudential