Don't Miss Out On $8,000 in Cash Back
The IRS first time home buyers credit is set to expire on November 30, 2009. While the National Association of Realtors and home builder organizations are pushing Congress and the White House to extend and expand the program, do not count on it.
You need to find that house and get it under contract within the next 3-4 weeks at the latest. With all the talk about health care and the expense involved for that, Congress may find it a hard sell to expand another government incentive program. Cash for Clunkers ran out of money and this may also. So in other words, don't bank on anything when it comes to our government.
The important thing right now is to get pre-approved by a lender, find the right house for you and get it under contract now. Additionally, there are lots of local government down payment assistance programs in place as well as $100 down options when purchasing a HUD home.
The program ends on November 30th and you may receive up to $8000 or 10% of the value of the home whichever is less based on your income. But the closing must occur before the 30th (not just a contract to purchase but the closing and funding) The good thing is there has never been such an array of homes to choose from. The bad thing is all of the lending head aches. Be prepared and know that this process will require some patience and work on your part. When the lender asks for something, you must get it immediately. Do not buy one single thing on credit during the time you are qualified until after you close. That will kill a deal.
There are so many horror stories about loans that do not close for qualified buyers. You must give yourself time to have an alternative if the home you contracted to buy does not qualify for some reason and believe me the lenders are looking for any reason. Let me give you an example:
Tom Smith is buying a condo from Fannie Mae that was a foreclosure. The condo appraises for $140k and the buyer has contracted to purchase the property for $120k since Fannie Mae wants to sell it. Smith is putting 20% down on the condo and has a 760 credit score. Smith is also using a Fannie Mae loan to purchase the condo. So Fannie not only gets to sell a non-performing property, they also get to lend to a highly qualified buyer. But one day before closing, the mythical underwriter who no one ever sees or hears from until the 11th hour says that because the property was converted from apartments to condos over two years ago that Mr. Smith will now have to put 25% down in order to buy the property. Keep in mind that Smith is buying the property at 14% below the appraised value and offered to put 20% down therefore leaving the value of the loan at only 66% of the total value of the home. But Fannie doesn't want to sell it without the extra 5% down. Fortunately the buyer had the additional $6k to put down on the property and it closed. But if he had not, the deal would have died and the buyer would have to start his search over again and Fannie Mae would be stuck with the non performing property and a lost loan. No one along the way, the REALTORS, appraiser, home owners association, loan officer or desk top underwriter could have logically foreseen this issue. Good business, I don't think so.
The moral of the story is this could happen to you and if you wait until the last minute to find your dream house, it might be too late to get that free bailout money from the government.
Don't waste your time, call a REALTOR now and find your home.
No comments:
Post a Comment