First Time Home Buyer

Chances are, if you are a potential first time home buyer you are looking at the market and the incentives and are ready to take advantage of them and become a first time home owner. There are many areas that are facing depreciation and these locations offer some great incentives to buy. Take note, this is not happening everywhere. Some places, such as Seattle, Atlanta and Dallas are not depreciating like the areas of some parts of California, Florida and Arizona. In the areas facing depreciation it is not uncommon to find homes that once were selling for nearly $450,000 last year to be on the market today for a hundred grand less, and still not selling. It is also not uncommon to find the homes that are selling are doing so at around 70% or less of the homes appraised value because it has taken so long to sell. Many of the homes selling today are actually selling for less than what was originally paid. This is a pretty good argument as to now being the ideal time to buy that first house. It is actually easier to buy a first home today than simply buying a different home. This is because the first time home buyer does not have to sell a home first. Additionally there are a lot of incentives available for the first time home buyer.

Finding affordable and quality homes as well as finding the right incentives and programs can be difficult. Many realtors and companies are coming to the rescue of the first time homebuyer to make the process easier. The more these companies can inform the first time home buyer of the options that are available and what they are able to do the more the market will begin to recover and thing will maybe not get any worse. If you have been thinking of buying your first home sometime in the next 5 years this would be the ideal time to take advantage of the programs, incentives and the buyer’s market and buy your first home now.

Stop Waiting? Buy Now!

There are a lot of websites that can help point you in the right direction and answer questions you may have. If you are ready to buy it will probably benefit you to go ahead and buy now rather than wait. There are a lot of buyers that are concerned about the timing and want to time their purchase to the time when prices drop to their lowest point. By then the opportunity to buy a new home may be too late or the competition too high. It is better to look around for the right home, look at the neighborhood and get a feel for the housing market in the area. While doing this continue to build up your funds and your down payment and talk to lenders and real estate agents to help you decide the time to put a bid on a house. Trust the lenders and agents to give you the advice you need when you are ready to buy a home at a price you are comfortable with.

Talking to many people today they are looking forward to becoming a first time home owner and with the prices of homes sinking rapidly they think it is a great time to buy. Homes that would previously be far out of reach are now becoming more affordable, to the excitement of the potential first time home buyer. Unfortunately, according to several reports, mortgage insurers have been upping their standards in the United States. What this means for the first time home buyer is they have to be at the top of the bar that is raised to obtain the mortgage. Mortgage insures are defining an ever increasing number of markets as declining. In these areas that they list as declining they are requiring a higher down payment as well as higher premiums. This means that the homes that were thought to now be affordable are still out of reach for the first time home buyer. The buyer will have to have a substantial down payment and in the declining economy saving 5 to 15 thousand dollars for a down payment is out of the question.

The market that seems so appealing to the first time home buyer and others hoping to cash in on the floor dropping out of the housing market may not be as profitable as once thought. The national home price index fell about 16% from its peak in the second quarter of 2006 and in some markets houses are selling for 50% less than a year ago. They; however, are not being sold to many first time home buyers but instead to developers hoping to turn a profit.

Additionally there is a surplus of bank owned forecloses today making prices fall even farther. Between the foreclosures and other homes on the market there are plenty of affordable homes to choose from. If only the tightened mortgage standards would allow people, including the first time home buyer to clear out the inventory. There are ways of obtaining a substantial down payment and the first time home buyer with control of his credit score and shows reliability and responsibility will be able to cash in on the falling house prices and afford the unaffordable dream home. With private buyer assistance programs, gift money from family, savings over time and the sale of high dollar assets even the first time home buyer will be able to meet the heightened lending standards of the mortgage insurers.

Business is still business and companies are still in to turn a profit. Making sure you are at the top of the class will ensure you obtaining that mortgage and moving into the home you have dreamt of. Run your credit report, make sure it is in good shape, have a substantial down payment ready and start shopping for that dream home today.

Recently it has become a common question; ‘should my best friend and I buy our first home together to share and be able to afford more home than on our own’. Immediately many would think this to be a great solution without any further consideration; however, there are serious considerations that have to be made before making such a significant decision. Among these considerations are: legal ownership, mortgage management and future goals. A transaction as large as a house is always a big decision and requires long-term commitment whether alone, in a family or in a mutual partnership. Open discussion about all questions that come up is advisable as well as a plan of action for things that may come up. What will the situation be if a partner wants out due to marriage? What happens if there is an irrevocable end to the friendship? What will the course of action be if one partner faces dire financial circumstances? Co-ownership can be affected by all of these situations. This does not mean it is not a viable option with all things contractually worked out.

Legal Ownership: Most states consider the legal ownership of a partnership on this scale as TIC, tenancy-in-common. TIC is given the freedom to customize their shared ownership agreement to their desires and needs. Generally details of the division are writ into the agreement; most commonly on a 50/50 percentage basis. The agreement can state that the owners have first opportunity to purchase the other owner’s percentage should one choose to leave or that the home would be put up for sale and then divided by percentage. This is really the easy part of TIC, more difficult agreements are based on the division of the home maintenance, utility costs, upkeep and other home related decisions. All of these considerations need to be worked out in the TIC agreement before obtaining the mortgage.

Mortgage Management: In a tenancy-in-common you have two mortgage options available; all intended owners can apply for one mortgage loan together. In this situation, any one person defaults on the loan all owners are equally affected. The owner who faithfully pays his or her share of the mortgage can end up with credit problems if the other owner does not pay his or her share as responsibly. This could even lead to the entire home being foreclosed on. The second option is to apply for a fractional ownership loan, which is also called a TIC loan. Each intended owner would apply for and commit to a mortgage separately and each mortgage would be secured for their personal share of the property. With this mortgage type one owner’s problems do not affect the other’s credit or ownership.

Fractional loans are hard to find and harder yet to qualify for. Educating yourselves completely and having a plan of action for every step of the way will help you in your endeavor. Although more difficult a TIC is not an impossibility and is a viable way to become a first time homeowner.