Out and About Yukon and OKC

Zero down loans are (almost) entirely a thing of the past. While many wanna-be buyers are tucking their down payment pennies away, many of these folks feel that they’re missing out on deals in the meantime!

Here are my top 7 tips for coming up with those critical down payment funds:

Know how much you need to save. We all know that to reach a goal, you have to set a clear target. So, first things first: figure out exactly how much of a down payment you actually need. If you have a credit score of at least 620, you may be able to qualify for an FHA loan that only requires a 3.5% down payment. (For a $200,000 house, that’s $7,000.) Check in with your agent and mortgage broker regarding (a) whether you qualify for an FHA loan and (b) whether you’ll be able to find a property that works for you and for the FHA within the realm of what’s affordable for you.

It’s true – the conservative lending guidelines on FHA loans will limit how much you can spend, and require you to pay monthly private mortgage insurance (PMI), if you put less than 20% down.  But PMI is tax deductible and eventually goes away.  So what this really means is that you’ll more than likely end up with a mortgage payment that you can easily afford to pay for a long time to come.  And it might be less house than you might be able to buy with a higher-down payment, less conservative loan, but less is more, people.  Less is more (especially when it comes to mortgage payments!).

Also, while no-down-payment loans are almost extinct, there is a little tiny exception for borrowers employed in a certain set of professions: doctors, lawyers, dentists and C-suite executives of Fortune 500 companies are all potentially eligible for zero down professional loans offered by a couple of small, private banks.  These loans do have the basic credit and income requirements, but they require ZERO down payment, because these professionals are perceived as posing a very low risk of foreclosure.  In some cases, pros can qualify for up to $1 million with no down payment!

Save your dough in a high-interest online savings account. Regular bank savings accounts are paying right around .10% interest right now.  Ally and SmartyPig are paying somewhere between 2 and 3 percent.  Every little bit helps, right?

Sell your junk. eBay, anyone?  Not only does selling the stuff you no longer need or use generate cash to put into the down payment kitty, it has the side effect of feeling almost like preparation for moving. Clear out your clutter, make room for your new life as a homeowner, and make a few bucks at the same time.  That’s what I call a #WIN.

Get a side gig – Blogging, weekend table-waiting, baking, dog-walking – it’s not overkill to get a second job or start a small side business to help you either pay down your debt or save up toward your down payment.

Borrow it from your city or state.  The federal homebuyer tax credit is history, but many state and local governments still offer incentives for homebuyers in the form of down payment assistance programs. Most often, these are second mortgages with very low or no payments for 5, 10 or even 30 years (in Oakland, California, for example, the down payment loan doesn’t have to be repaid for 30 years or until you sell or move out).  And many will help not just low-income buyers, but also those with moderate incomes, or anyone buying their first home!

Google <your city> <your state> and <down payment assistance> to see what your local government has on offer, and what it takes to qualify.

Borrow it from yourself!  If you have a 401K or Roth IRA account and some years to go before retirement, you might be able to tap into it or even borrow against your own funds for your down payment.  Currently, you can take up to $10,000 out of your Traditional IRA with no penalty to put toward the purchase of your first home, but you will be taxed.  You can take as much as you want out of your Roth IRA contributions with no penalty or taxes, though, and as much as $10K from your earnings penalty-free for your down payment.  The rules get a little tricky, here, so definitely check in with your tax and financial advisors.

And while you can’t similarly draw from your 401K, many retirement and pension plans will allow you to borrow the money against your funds, then repay it to yourself – at interest.  Hmmmm, pay your lender back with interest, or pay interest to yourself – choose you!  But first, get some advice from your CPA or financial planner.

Get the gift that keeps on giving.  Cash gifts from relatives are seen by many lenders as a legitimate resource for down payment funds.  There are guidelines, though - some lenders require that you put your own money on top of a small cash gift (less than 5% of the purchase price); but will let you use gift money exclusively if the gift is 20% of the home's price or more.  Also, most lenders require a "gift letter" documenting that the giver is your relative and is not expecting you to pay the money back.

Check in with your mortgage broker for a briefing on gift-money guidelines.

If it seem like a "gift" is a hard thing to come up with - don't dismiss the concept too soon.  I know more than a few now-homeowners who had no clue where their down payment money would come from until they were reminded about gift money as a strategy, then cashed in long-ignored offers of help from parents, aunts and uncles. 

Source: Trulia - By Tara-Nicholle Nelson

Tic, toc, tic, toc...time is running out for $8000 tax credit program.

As of today, March 2, we only have 58 days left till the expiration of the $8000 tax credit program for first time home buyers and of course $6500.00 tax credit for repeated home buyers.

It takes about 45 plus days from the time of an offer acceptance to the closing table. Not to mention that there is a lot of time needed just to find that right house. If you were thinking for some time to take an advantage of this great financial incentive this is the time to act.

Read more about: Extended $8000 Tax Credit for First Time Home Buyers

So let's get together and talk about your options and choices...and together we will find you a great house...

                                                     FIRST TIME HOME BUYERS TAX RETURN FORMS

Many people are gearing up to file their tax returns. Many of my clients are asking what forms do they need to use to file for their First Time Homebuyers Tax return. I thought about researching the subject and share few things on my blog for the simplicity of it.

Of course the best way is to seek an advice of your friendly accountant or CPA.

A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the 2008 Form 5405.

A taxpayer who purchase a home after Nov. 6, 2009 use a revised form 5405:

First-Time Homebuyer Credit and
Repayment of the Credit (Rev. December 2009)

Instructions for Form 5405 Internal Revenue Service
(Rev. December 2009)

Source: IRS

Hope some of you will find it helpful.

Time is running out for the new home buyers...

Your $8000 reasons to buy a new home will expire on November 30, 2009.

FIRST TIME HOME BUYERS TAX CREDIT TOP 10 LIST

1. Amount of Credit - 10% of purchase price, not to exceed $8,000
2. Eligible Property - Single family residence (principal residence)
3. Not Refundable- Reduces or eliminates income tax liability, will receive refund for unused amount
4. Income Limit - Single taxpayers with income up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
5. First Time Home Buyer - Purchaser and Purchaser's Spouse may not have owned a principal residence in three years previous to purchase
6. Revenue Bond Financing - Purchasers who utilize revenue bond financing can use credit
7. Repayment - no repayment for purchases on or after January 1st, 2009 and before December 1st, 2009
8. Recapture - If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009
9. Termination - Program expires on December 1st, 2009
10. Effective date - Effective as of January 1st, 2009 

Finding a house takes time but also don't forget that these items require time (usually about 45-60 days)to process a transaction:

1. Finding a Realtor whom you trust and who will best represent you 
2. Writing an offer
3. Offer acceptance and negotiations
   
4. Finding a Lender
5. Loan application
6. Survey
7. Inspections
8. Repairs
9. Appraisals
10. And other issues which often come from lenders, title companies etc...

TIME IS RUNNING OUT SO DON'T DELAY ANY MORE THAN IS NECESSARY!

With smiles,

Bo in Yukon

TAX CREDIT CAN BE USED FOR DOWN PAYMENT

"Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says.

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table."

Let me know if you need more info, details or have questions...405-812-1572

also here is a link to help you search for new homes in Yukon or Mustang, OK: www.Okla-OK.com

With smiles,

Bo