The Market is down but can I afford this House?

It’s the New Year and everyone’s pumped up and ready to fulfill their resolutions. The housing market is down and the words “tax credit” looms foremost in the minds of hopeful buyers; yet the most important question remains to be answered. Can I afford to make such a purchase?

Well, effective January 1, 2010, the new Real Estate Settlement Procedures Act (RESPA) rule goes into effect and should help to clarify some of the questions buyers may have regarding affordability. The Good Faith Estimate or the GFE as it’s commonly called, allows the lender to outline the fees and settlement charges associated with obtaining a mortgage, so that a buyer shopping for a loan can decide which is best, as well as the affordability. The form will be standardized so no matter which lender provides it, the form should look exactly the same thereby allowing for easier cost comparisons.

The GFE should give loan terms and settlement charges, showing what charges can change and those that will remain unchanged. This is important because often first time borrowers in particular, tend not to think of or be aware of other associated expenses other than the purchase price.

It is hoped the new rule will have the desired effect of helping home buyers make more informed decisions.

My First Home

This is a great time to buy a home if you are in the market. The Housing market is down, interest rates are at an all time low, and you might just be able to afford that dream house you’ve been wanting for so long; but before you jump in, there are resources that are available to you that you might want to seek out.

The US Department of Housing and Urban Development (HUD) website at www.hud.gov have a wide array of topics pertinent to buying a home and will answer many of the common questions new home buyers have.

They go through the steps to be taken on making such a large commitment.

Here are some of the points they cover:

a) How much can you afford
b) House shopping
c) Home buying programs
d) Your rights
e) Shopping for a loan
f) Home inspection
g) Making an offer
h) Homeowners insurance
i) Signing papers

Remember you can't have too much information to assist you in making an informed decision. Happy shopping.

New Year's Resolution

So here we are at the end of 2009, staring into the eyes of 2010 and wondering yet again what happened, how did time go by so quickly….. still so many plans yet undone. If you are one of the many that fell short on your resolution to purchase a home in 2009, there’s still a chance to make up and take advantage of the Homebuyer’s Credit which was extended and expanded in November 2009 to April 2010.

What is a Homebuyer’s Credit? Well, it is a tax incentive given by the government to individuals or families purchasing their principal home, provided the purchase occurred in 2008, 2009 and now into 2010.

In order to be eligible, Buyers must enter into a binding contract to purchase a principal residence, not a rental or a vacation home, no later than April 2010 and must close on the purchase before July 1, 2010. The credit is in the amount of up to $8,000.00. As always there are additional eligibility requirements which are available from your Real Estate professional or visit: www.irs.gov for further details.