Many first time buyers and even some second time buyers are unsure of how to figure their down payment and closing costs. Not having an understanding of the down payment and closing cost can create a hesitant and unsure attitude as they look at properties – keeping them from making a good decision when they find the right property.

Down Payments

A down payment for a home is usually between 3½% and 20% of the total cost of the home. The amount of the required down payment depends on your credit history, income, the cost of the home, and the type of mortgage you choose. Many first-time homebuyers put down between 3½% to 5% of the cost of the home.

Saving for a down payment is the first step toward homeownership and it helps you prepare for the financial obligations that come with owning a home.  If you do not have enough savings for a down payment, you may want to postpone house hunting to give yourself an opportunity to save for a down payment rather than looking at a low down payment mortgage.

Keep in mind, when you apply for a home loan, in addition to your down payment, you should have at least three months worth of mortgage payments saved, or what lenders call cash reserves.

Most lenders want to know the source of your down payment and have restrictions about how much can come from gifts from a relative. Ask your lender for more information.

Closing Costs

Closing, or settlement, costs are fees you pay when you actually get your loan from your financial institution. These include costs will include your points, taxes, title insurance, financing costs, items that must be prepaid or escrowed, and other settlement costs. You should negotiate for lower fees the same way that you should negotiate for the best rate. Some fees, such as taxes, may be fixed but, your lender may be willing to negotiate others.

Closing costs generally range between 2% to 7% of the property value. You’ll receive an estimate from your lender after you apply for a mortgage. You must pay these costs before you move into your new home.

PMI Insurance

Generally, if your down payment is less than 20% of the price of the home, you will be required to purchase Private Mortgage Insurance (called PMI or sometimes MI). This protects the lender if you should be unable to pay off the loan.

Federal law requires PMI to be cancelled under certain circumstances; for example, when you have paid off a certain percentage of your mortgage or your home’s property value has increased to a certain percentage above the value of the mortgage.

Contact your lender for specific information about the status of your private mortgage insurance.

Great news for the first time home buyer for those of our armed forces. Congress has acknowledged their unique circumstances and is making exceptions for buying a home applying to both the $8,000 tax credit and $6,500 tax credit. Congress has extended the credits for those that qualify for one year.

For more information on tax credits and other IRS information you can link to their website at IRS.GOV

Phill Wright at Golden West Credit Union just wrote a great article on his blog concerning new income guidelines when buying a home. His knowledge on changes when qualifying for a home mortgage  loan can help you. Whether you are a first time home buyer or just moving up, you will want to be prepared. You can contact Phill Wright direct for additional information and pre-qualifying for a mortgage loan at 801-786-8131.

“Be prepared to provide more documentation than ever before. Lenders have been very squeamish over the last two years with the housing melt down. Along with their hesitation to originate new loans the government has continued to squeeze the industry with tougher guidelines. This means more documentation from borrowers.”

You can see Phill’s complete article at The Mortgage Note

MLS # 958764  This beautiful home was just listed in Tremonton. The kitchen counter tops are being completely re-done. See the full tour on YouTube at http://www.youtube.com/watch?v=tjOKo69VMLE 

Your Consulant for Life

Please call or email me anytime

cliffhayden.com     cliff@cliffhayden.com     801-645-4017

If you or anyone you know is looking to buy or sell Real Estate please give me a call. I can also help those planning to move anywhere in the U.S., Canada or Mexico through my great referal network.

Back on the market this 11+ acre playground is now priced at $$43,900 and could be yours. Located in the Sunridge Subdivision east of Huntsville this great recreational property is perfect for camping, ATV riding, horse riding, hiking and more. This recreation property is located up in the mountains behind a locked gate and has great views. Don’t miss out on the opportunity to have your own mountain playground.

P.S. If you or anyone you know is looking to buy or sell real Estate please give me a call. I can also help those planning to move anywhere in the U.S., Canada or Mexico through my great referral network.

Acitve listings have picked up this spring in Box Elder County. If you are looking to buy you now have more choices to look at in almost every range of price or size. As a seller you now need to make sure your home is priced right and staged to sell.

When looking at the real estate market make sure you are getting sound advise as a buyer or seller. Home mortgage rates are still in a very favorable position for home sales. Most all of my clients are really excited about their opportunities in today’s market once they have current and relevant information for making their choice. I am always available by phone or email – so go ahead and ask me your questions.

P.S. If you or anyone you know is looking to buy or sell real Estate please give me a call. I can also help those planning to move anywhere in the U.S., Canada or Mexico through my great referral network.

Home Mortgage rates are up slightly from last month but are still looking great.

Current Mortgage Rates

If you or anyone you know is looking to buy or sell real Estate please give me a call. I can also help those planning to move anywhere in the U.S., Canada or Mexico through my great referral network.

With only one month until the new $8,000 first-time homebuyer and the $6,500 existing home buyer federal tax credits are set to expire, time is running out on an opportunity that buyers and sellers may not see again. The tax credit, which was originally created in mid 2008, then expanded in January 2009 and extended again this past November, was only designed to be a short-term incentive to drive more buyers into the housing market.
That’s why many people in Congress are saying that, come April 30, 2010 when the credit expires, “That is it!”
So the clock is ticking. The average real estate transaction,
from offer to closing, takes approximately 90 days and that is just about where we are now. To meet the federal deadlines, a buyer must have a binding sales contract
in place by April 30, and have the home purchase completed by June 30. To achieve those time frames, buyers
need to act almost immediately. Those deadlines also mean that this is also a prime opportunity for sellers. As the April 30 deadline gets ever closer, we are bound to see an influx of home-seekers who are hoping to find a house and make an offer in time to receive the tax credit. So for sellers who have been considering moving up in the market, downsizing, or relocating, now is an opportune
time to put their house on the market.
We’re at a unique time in real estate. The tax credit deadline is helping to create the “perfect storm” in the market, due to four key elements – I.I.I.P:
• Inventory: Although there are an overwhelming number
of markets where inventory is down, and even with a decline in inventory year over year, there are still plenty of homes on the market for buyers to choose from.
• Interest Rates: Mortgage rates remain at near historic
lows. This means higher purchasing power for buyers.
• Incentives: The extension and expansion of the homebuyer tax credit is providing benefits to buyers who may have otherwise not been interested in getting into the market.
• Prices: Affordability remains at an all time record level nationally and in many of our local markets as well.
While the urgency of trying to find and close on a home before the deadline may seem stressful, it doesn’t have to be. For those who are in the early phase of the home buying process, there are a few key things that you can do to speed up the process:
• Find A Qualified Real Estate Agent. If you do not already have one, work with a real estate agent who will be able to help identify mortgage lenders, home inspectors,
lawyers and others who will play a role in helping to get the buying process completed by the April 30 deadline.
• Know Before You Go. Free online tools and mobile applications for smart phones are available to help you quickly and conveniently learn about neighborhoods and view homes on the market. Consult with your own tax advisor as to your ability to qualify for the tax credit based upon income levels, length of residency/homeownership
and housing prices. Arming yourself with as much knowledge as possible in the beginning is bound to save time in the long-run.

HOMEBUYER TAX CREDIT DEADLINE QUICKLY APPROACHING REALITY
What buyers and sellers need to do now so they don’t miss out.
• Get Pre-Approved for a Loan. “Pre-approval” means that a lender has checked your credit and other credentials and is prepared to making a loan. Not only is this valuable to sellers, and may give you an advantage over other offers they receive, but it could speed up the loan process and allow you to complete the necessary paperwork before the tax credit deadline.
The tax credit has done a lot for the real estate industry since its inception. According to the National Association
of Realtors, 47% of all homes sold last year were purchased by first-time home buyers. Paul Bishop, NAR vice president of research, has said that first-time buyers “are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade and stimulate related goods and services.”
For additional information and provisions on the homebuyer
federal tax credit, visit www.federalhousingtaxcredit.

For all your real estate questions and needs – call me today.

Rates this week are still looking great!

Well here we are another month gone and the market continues to have plenty of inventory. I have included with this months report the absorption rate.

Active Properties:  2,156

Under Contract Properties: 251

Sold Properties: 244

Absorption Rate : 13.07 Months