If there ever was a perfect climate for a first time buyer to purchase a home, it is now. Why is that? Because there are bargains in both home prices and available financing terms! A combination like this allows a first time buyer to obtain more of a home for their money at less of a price.
Let’s take a look at home values. The Metro Denver real estate market has many neighborhoods offering great values in homes. Some homes are foreclosures or short sales and others are being offered by the owner. It’s very reasonable to expect to get a newer home priced in the low to mid $200′s. A few years ago that was not possible.
Just recently Uncle Sam offered to lend first time home buyers their down payment for homes up to $250,000 using a tax credit. This means the buyer must initially come up with the down payment, but will be able to deduct it from income taxes.
If the buyer doesn’t actually have the down payment, but has a relative willing to lend them the money, FHA will allow a 2nd lien to be attached to the property. This would allow the buyer to borrow the money from the relative and pay it back within a year.
There are additional rules, the tax credit is for the lesser of 10% of the purchase price or $7,500. It has a 15 year recapture rate. The income restrictions allow the first borrower to earn no more than $75,000 a year. For joint buyers they can make up to $150,000 combined.
This scenario works best with a home purchase of $250,000 or less.
Some buyers don’t have wealthy or helpful relatives but they don’t need to feel left out. The Colorado Housing Finance Authority also known as CHFA can step in and lend a hand.
CHFA makes loans to buyers who do not own any other property. The best thing about CHFA’s loans is the low downpayment. Qualified buyers can get into a home with only $1000 of their own money. Their interest rates are competitive and sometimes slightly higher, but they are the only institution that will allow a buyer to create a mortgage with so little down.
CHFA does have income guidelines, but they are quite generous. The maximum loan amount is $417,000. The biggest catch is the borrow(s) must attend a Home Buyer Education Class BEFORE executing a contract! The Home Buyer Education Classes offered are free and can be taken onsite or online.
If I were a first time home buyer, I’d…
make an effort to investigate my home ownership options. There may never be a time better than the present moment to become a homeowner!
If you would like to discuss your options, please call me. I welcome your call, with no obligation, no high pressure sales pitch. Just information the information you need to know to make a decision. The choice is yours, what would you like to do?