2009 Home Buyer Tax Credit

Below are some of the assistance programs  for buying with down payment assistance or making repairs to your home.  Many of the programs have income, occupancy and home buying status requirements.  I recommend that you contact the people on the website or flyers to dig deeper into the programs to see if you may qualify.  This is meant to be a starting point to assist you in discovering the many programs for home buying assistance.  If you are looking to buy a home feel free to contact me and I will get you in a great home.  Happy House Hunting!

Central Urban Development, Inc.

Building Low Income Housing in North East Oklahoma City.

In April, 2004 the company launched its initial residential project, the construction of thirty new quality homes in the John F. Kennedy (JFK) subdivision. This project is planned for a three-year time frame. The $3 million housing effort is fully supported by private, city and many support organizations whose mission is to see a total revitalization of this quadrant.

The houses are 1,200-1,500 square-feet brick veneer homes each with two-car garages, three bedrooms, two full baths, living/dining room, kitchen equipped with some appliances, laundry room, and spacious closets. The homes are designed to be energy efficient and not burden the owner with maintenance expenses. Our goal is to attract professional families who left for the suburbs back to the inner city neighborhood to increase the social value of the community as well as its property values.

www.cudi.org

Flyer

urban-league

Council Of Neighborhoods

Building low income houses.

www.councilofneighborhoods.org

Flyer

council-of-neighborhoods-programs-and-services

Urban League of Greater Oklahoma City, Inc.

The Housing and Community Development Department provides quality & affordable homes to low to moderate income families by rehabilitating existing structures & constructing new homes.

http://www.urbanleagueok.org/housing.htm

Neighborhood Services Department Housing Programs Division

Grants and interest-free or low-interest Loans to purchase and repair homes

http://www.okc.gov/neighborhood/homes/affordable.html

Weatherization Program

Home repair and weatherization.

http://www.caaofokc.org/index.php?option=com_content&task=view&id=17&Itemid=30

Community Action Agency of Oklahoma

Down Payment Assistance and Closing Costs

http://www.caaofokc.com/index.php?option=com_content&task=view&id=23&Itemid=36

Flyers

community-action

Oklahoma Housing Finance Agency

Down Payment Assistance

http://www.ohfa.org/OHFAAdvantage/homebuyers.htm

Flyer

ohfa-advantage-loan-program

Jefferson Park Neighbors Association, Inc.

Sell remodeled and new homes that qualify for Down Payment Assistance.

http://jeffersonparkok.org/?page_id=36

Map of target areas for down payment assistance programs

City of Oklahoma City Down Payment Assistance Programs

The new stimulus bill has been signed and in it was included the latest incarnation of The First Time Home Buyer Tax Credit.  So here is what you need to know.

First Time Home Buyers

First time home buyers are eligible for the tax credit.  People who have not owned a home in the last three years are considered First Time Home Buyers and are eligible for the First Time Home Buyer Tax Credit.

Income Limits

For the full credit you must make less than 75k if you are single and 150k if you are married.

2009

The Tax Credit is for First Time Home Buyers who purchase a home as a primary residence in 2009.

$8,000.00

The tax credit is 10% of the home purchase or $8,000.00 whichever is less.

No Payback

The old $7500.00 tax credit had to be paid back over 15 years.  The new tax credit is a freebie.  No payback as long as you live in the home for 3 years. 

Refundable

This means you get a check.   Unlike a deduction which just reduces your tax liability, the new first time home buyer tax credit drops straight to the bottom line.  Figure out what your taxes are without the credit then move the number $8,000.00 in your favor.  Example: without tax credit you owe $3,000.00.  With Tax Credit you get a sweet check for $5,000.00.

I usually like to end with a call to action like now is a great time to buy a house, but if you can’t do the math on this one then maybe you shouldn’t buy a house.  If you have any questions about the details email me.  If you are ready to get started looking for a new home email me.  Carpe Diem.

So you are looking to buy a new home and you are hearing about discount points.  Or you already know something about discount points and you think you have the answer.  Here is the mistake buyers often make is they base decisions on their past experience.  They don’t realize how fluid the mortgage market is.  The problem is more than likely their experience is take from their experience with very few real estate transactions.  What you need to understand about the real estate industry is that there are no timeless universal correct answers.  

The game of real estate changes dramatically year to year, month to month, and even week to week.  This is why you cannot rely on your own experience of the past.  You cannot rely on experience of others from their past.  You need to educate yourself the best you can with current information and find a Realtor that is honest and actively selling houses every month that can help guide you.

Discount points are pre-paid interest that change the interest rate you pay over the term of the loan.  Here is the question, “Are Discount Points a good Idea?”.  Well it depends.  First, let me tell you upfront I am writing this because Discount Points have become a much better idea in the past few months.  Why?  Well.  It is all just math.  How much is a Discount Point.  One point is equal to 1% of the loan amount, so if you have one point on $150,000.00 then you will pay $1500.00 at closing.   Take for example the following choice.  One loan has one discount point and an interest rate of 5% and the other has no discount point and a 6% interest rate which one do you want?  Well, let’s look at it.

You would calculate it this way.  First you figure out the difference.  With the loan up front you will pay $1500 at closing but your monthly payment will be $805.00(refer to chart from previous post).  With no points you will not have the $1500.00 at closing but with your interest rate at 6% your monthly mortgage payment will be $899.00(refer to chart).  So which is better?  Well it depends on how long you will be living in your new home.  With one you save $1500 but pay $94 more a month.  A simple calculation 1500/94=15.96, shows that if you are going to be there for more than 16 months you will be saving quite a bit money with the first choice of the discount point.  If you plan on moving in less than f16 months than you should choose the one with no points.

The difference a point makes in the actual interest rate will vary at different times.  In the current market the above example is about right.  You save a point on interest for every discount point.  Three years ago it was more like you save 3/8 of a point on interest for every discount point.  You can see the calculations would be very different.

This is just a very small part of understanding which is the best loan right now.  So again I would recommend that you do lot’s of homework and find a knowledgable Realtor.  Selecting the wrong loan could cost you thousands over the life of the loan.

Ask questions.  Don’t be shy.  Very few have a full understanding of all the complexities of the process.  Even the veterans we see that think they have it all down usually only have a working knowledge of the surface.

Just between you and me.  I think Lenders purposely try to make it complicated to make it easier to sell you a product that may be good for them but bad for you.  Don’t let this happen.  Knowledge is Power.

This in from the Associated Press

NEW YORK — The price of money for American consumers went on sale in a spectacular way Tuesday after the Federal Reserve cut interest rates to their lowest level on record and promised to keep them low for a long time.

In response, most banks cut the rate they charge their best customers, known as the prime rate, to 3.25 percent from 4 percent. The last time it was that low was in 1955, according to data from the Federal Reserve Bank of St. Louis.

What does this mean to you as a Buyer?  It means that the money you need to buy a new house is cheap.

How Low are interest rates you ask?

Here is what a local lender here in Oklahoma City was quoting today with no points.

5% Fixed Interest Rate on an FHA Loan. And are you ready for this on a 95%LTV with a 740 FICO score we are at (drum roll please) 4.875% Fixed Interest Rate.

That is right 4.875%!

These rates are historically speaking about as low as they get. See chart below from  Freddie Mac.

Monthly Average Commitment Rate And Points On 30-Year Fixed-Rate Mortgages Since 1971

If you took a close look at the above table you will notice that you did not see any loans under 5% and you definitely did not see any under 5% with no points.

If you were looking for the perfect time to buy a house.  Look no Further.

It was reported today that new housing starts are at their lowest since they started tracking them in 1959.  What does that mean?  That means there are very few new houses being put out there which will lead to decreasing inventories leading to a stabilization of home prices and possibly in the near future increasing house prices.  In short it means we are at or near the bottom of housing devaluation.  Throw in the lowest mortgage interest rates ever and a $7500.00 Tax Credit and those sitting on the sideline are going to look back on today with regretful nostalgia.

Don’t miss out on a once in a lifetime opportunity and I won’t have to say “I told you so.”

Search for a Home Here.

Get a Loan Quote Here.

Only you can truly answer that question.  As you look at the prospect of a home payment it may seem quite daunting but here are a few things to consider.

Home prices historically have risen about 6% a year.  Meaning the home you are purchasing may be one of the best investments you make and as your investment grows you are able to enjoy the comforts of your home as well.

 The primary vehicle to retirement security for many has been their home.  The US savings rate has steadily declined from almost 10% in the 1960s to zero in this decade.  The counter force to this for many has been the appreciation of their home.  Home equity has been the saving grace for many a retiree.

One of the final things to consider is this.  Your house payment will be fixed.  Your rent is not.  Each year your payment will seem smaller and smaller.  As time goes by your salary will go up.  Prices of most things you buy will go up but if you have a fixed rate loan your payment will be the same.  So in a way you are locking in the price you pay for a place to live for 30 years.  After that of course you will be paying nothing.  Imagine now two peope who had a choice to buy a house or rent 30 years ago.  The price to rent or the payment to buy would be about the same.  It would have been about $200.00 for the average house.  Flash forward 30 years to 2008.  The guy who chose to rent would now be paying about $800.00 with an infinite number of ever increasing rent payments to go. The guy who bought a house would now be making his last payment of $200.00.  Which guy do you want to be?