Pennsylvania First Time Home Buyer Assistance

UPDATE ON INTEREST RATES:  Average rates for conventional 30 year mortgages went up 5.05 percent this week from 4.93 percent a week earlier, according to Freddie Mac.  The interest  rates on a 30 year fixed loans had been below 5 percent for the past three weeks, close to the all time low of 4.71 percent set in December.

The 15 year fixed rate also rose this week, with jumping to 4.40 percent from 4.33 percent .

Long-term mortgage rates fell for the third straight week, pushing the average rate on 30-year fixed rate loans below 5 percent again, according to Freddie Mac.  

This week, January 28, 2010, average interest on a 30-year mortgage was 4.98 percent, compared to 4.99 percent  last week and 5.16 percent a year ago.  Rates on 15-year fixed loans also followed bond yields lower, averaging 4.39 percent, compared to 4.40 percent last week; and adjustable-rate mortgages also fell this week.

Check back weekly to get interest rates from Freddie Mac.  This is a great time to buy a new home.  Give me a call today and we can start looking for your dream home.

The IRS has released IR-2010-6, which provides a revised Form 5405 to reflect the changes to the homebuyers tax credit made in the extension and expansion legislation enacted in November 2009. 

You will need the HUD-1 or evidence of the transaction must be filed with all returns claiming the tax credit for the $8,000 First Time Home Buyer Tax Credit and the $6,500 Move-Up / Repeat Home Buyer Tax Credit. If you need more information, please read the instructions on the IRS  website.
http://www.irs.gov/newsroom/article/0,,id=218336,00.html

Usually First Time Home Buyers Don’t know all the “rules” of what to do or what not to do during the home buying process.  Here is a short list of “Don’ts” for you to look at when applying for financing for your new home.

THE  DON’Ts!!!  

Don’t deposit CASH into your bank accounts!
Please call your loan officer BEFORE you deposit any funds!

Don’t buy or lease an auto!
Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

Don’t move assets from one bank account to another!
These transfers show up as new deposits and complicate the application process because you must disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.

Don’t change Jobs!
A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

Don’t buy new furniture or major appliances for your “new home!”
If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet closing costs.

Don’t close credit accounts or consolidate bills!
Capacity is King. The more available credit you have,The better your credit score.

Don’t pack or ship information needed for the loan application!
Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

Your Real Estate Agent and Loan Officer may have more things you should not do when looking for your dream home, so give me a call today.

Here are several great reasons to buy a home:

Quality of life – a home provides stability and security for you and your loved ones.

Pride of home ownership – it’s your personal haven and you’re your own landlord.

Historically low-interest rates – around 5.5 percent in the U.S.

Tax Credit – U.S. government provides a special $8,000 incentive for qualifying first-time buyers.

Appreciation potential – your home investment can grow in value.

Equity buildup and debt pay down – homeowners enjoy an average net worth of approximately $184,000 vs. $4,000 for renters.

Leverage – where else can you buy an investment of this magnitude with 5-10 percent down?

Tax deduction advantages – property tax and mortgage interest write-offs (in Canada, home owners gain a tax benefit upon selling).

Tax exemption – up to $500,000 per couple or $250,000 per person on sale of a primary residence in the United States (no tax upon sale in Canada).

The real cost of renting – at $800 per month, with the average 6 percent rental increase per year, you will pay $126,536 over a 10-year period but have zero ownership of the property.

The last  week of  December 2009 ends with mortgage interest rates on the rise.  The average interest rate on a 30-year, fixed-rate mortgage (FRM) rose to 5.14 percent according to Freddie Mac’s weekly Primary Mortgage Market Survey (PMMS).   

The current average 30-year FRM, at 5.14 percent, is up from 5.05 percent last week, and up from 5.10 percent a year ago.  The 15-year FRM this week averaged 4.54 percent with an average 0.7 point, also up from last week when it averaged 4.45 percent, but down from year ago at this time, when the 15-year FRM averaged 4.83 percent.

The 5-year Treasury-indexed hybrid ARM (adjustable rate mortgage) averaged 4.44 percent this week, with an average 0.6 point, nearly unchanged from the 4.40 percent average last week, but more than a full percentage point below 5.57 percent from a year ago.

The week ending Dec. 31, the 1-year Treasury-indexed ARM averaged 4.33 percent, plus an average 0.6 point. Last week the rate was 4.38 percent. Last year, the 1-year ARM averaged 4.85 percent.

Start the New Year off right.  Give me a call today for more information.  Let’s start looking for your dream home.

A Home Inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of only repairs, that are needed.

The Home Inspector does not evaluate whether or not you’re getting good value for your money. Generally, a Home Inspector checks and gives prices for repairs on:

• electrical system
• plumbing and waste disposal
• water heater
• insulation and Ventilation
• HVAC system
• water source and quality
• potential presence of pests
• foundation
• doors and windows
• ceilings, walls and floors
• roof

Be sure to hire a Home Inspector that is qualified and experienced.

It’s a good idea to have an inspection clause in the offer when negotiating for a home. An inspection clause gives you an “out” on buying the house if serious problems are found, or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix a problem before you purchase the house.

I suggest that you be present during the inspection. Following the inspection, the Home Inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you’d like to purchase and it’s a good time to ask general maintenance questions.

The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.

Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

Let me show you how to own your dream home.  If you can afford your rental fees, then you can own a home.  With all the new tax credits for first time home buyers and mortgage programs offered, you may qualify to buy your dream home.  Give me a call today and I can show you several options available to first time home buyers.  Start the New Year off right with your keys to your new home.