Wow! What a relief it is to finally have all of our receipts logged in, and our taxes done!
I just wanted to talk today about buying your first house or investment in today's market.
In the county that we live in, the real estate market has slowed down considerably, as it has around the nation, and the numbers of homes sold has drastically dropped, which means that buyers have a great chance of getting an excellent deal on a house, an apartment building, or even a commercial property. The interest rate is almost at a historical low, and will enable buyers to have access to properties that in the recent past, they really could not afford. The only problem with this scenario, is that the mortgage process has been reduced to standard fare; few stated income programs, few 40-50 year mortgages, and few of the very creative programs that have been prevalent up to last summer (2007). The good news is that all of the government programs (FHA, VA, FMHA, etc. ) have strengthened, and have changed their criteria to enable less than perfect credit borrowers to buy their first home. These programs are not available for non-occupied investment buildings or houses, and are geared only for owner-occupied borrowers. The rates on these programs are competitive, and the down payments are very low, especially when you combine these programs with other programs for first-time homebuyers. Most all of the closing costs can be paid for by the seller, or a non-profit local program set up just for this purpose. The other option, is that you can receive gift money from a relative, close family friend, or even your employer. Your total payment for the house is exactly that, your total payment. It includes real estate taxes, home-owners' insurance, principle and interest, and sometimes other insurances that you can opt for to protect you in case of disasters. For these government programs, the house has to be in good shape, and cannot have any safety issues, or these same safety issues will have to be repaired prior to settlement by someone. Many times, it can be a negotiating factor, if you, as the buyer, will do the repairs at your own time and expense. But, keep in mind, that when you put an agreement on a property, and intend to take advantage of a government program for that property, then all of these issues will have to be decided in advance. Once the agreement is signed and ratified, then both buyer and seller are bound legally to the terms of the agreement of sale. So, it is very important to have a realtor and/or a lender, familiar with government programs that will help you to access the perfect program for your situation. Familiarize yourself with the mortgage program requirements and all of the explanatory paperwork that you will be given so that you are an informed buyer. Ask questions, and learn as much as you can about the process. Don't forget about the lead based paint addendums, the radon disclosures, the mold disclosures, the flood certifications, the wood-destroying insect reports, and all of the many disclosures and addendums, some regional, that you will be required to sign that you have received. This can be a frightening process if you don't have the knowledge. As we said before, knowledge builds confidence! Have fun looking for your first home, and don't forget to ask questions. You are welcome to send me a comment if you have any questions. See you next time.