My New Blog

First time home-buyers...........I think it is time to make this move now. It could be last opportunity . It looks like all  incentives that made home buying for you easy are slowly coming to the end:

• First time home buyer tax credit ( up to $8000) will expire in April 2010. You will have to have contract on the house by then. You have until June to close . There is no talk about extending it.
• FHA down payment is right now 3.5%. That will not change for borrowers with credit above 580 FICO Scores, but if your score is below that number, you will have to come up with 10%
• Up front mortgage insurance premium will raise to 2,25 % ( just to clear it up- all those  "%numbers"  are based on purchase price)
• Maximum seller's concessions will drop from   6% to 3%
• Example: you are purchasing home for around $100,000. Your credit is not so good. Right now your down payment ( with FHA loan) would be $3,500, your closing costs with prepaids would be around $7,000-this is just example- in no way I want to quote your closing costs. It is job of your Mortgage Broker.  You can ask seller to pay $6000 of that and if seller says yes, you bring $4,500 to closing.
• In new scenario your down payment will be $10,000, seller may contribute $3000 towards your closing costs, so you would have to bring $13,000 to closing- big difference ( especially if you don't have money). And of course you will not get your $8000 from government. 
• Just to let you - I don't know exactly when those changes will take effect ( except for elimination of tax credit) but I wouldn't wait to find out.......