What Is the Best Way To Buy a Home Today
Posted: Monday, October 26, 2009
by Jim Johnson
Metropolitan Mortgage
In the "old" days a home buyer was required to have 20% for a down payment. Then in the 1950's along came mortgage insurance offered by a company called MGIC. They pioneered the MI industry. If you had less than 20% down they offered a kind on mortgage insurance to insure the lender that if you defaulted the lenders loss was covered. The way it worked was simple. The less you put down the higher the insurance premium charged. The buyer was required to keep certain ratios to qualify. This meant the buyer bought less of a home because part of the monthly payment was for MI. This was pure gold for the American dream. It allowed for the present liquidity in the real estate market. Without MI selling a home would take far longer because there would be far fewer buyers.
If you are not a veteran the next best way is an FHA mortgage. The FHA mortgage requires a minimum of 3.5% down. Currently the First Time Home Buyer Credit is 10% of the purchase price up to $8000. So you can actually buy up to $228,571 and have a ZERO down purchase. But there is a bit of a catch. You have to have the 3.5% first, buy the home and then file for the tax credit. The federal tax form you file is form 5405. The credit is refundable so even if you didn't pay taxes you can still get the credit. In some states there are various funds where a qualified buyer can get a "loan" for the down payment and then buy. Check with your local mortgage broker to see if you live in a state when that option is available.
Currently the First Time Home Buyer Credit is set to expire after November 30, 2009. Senator bill Nelson (D) a member of the senate finance committee says the credit will be extended for a limited time. But no extension has reached the floors of either house yet. More at http://everettmortgageonline.com/homes-for-sale-everett-what-is-the-best-way-to-buy-a-home-today
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Top-level comments on this article: (3 total)your website is for purchases,mortgages;is this not optimal spammyness as you are advertising directly on Searchwarp?
You are advertising. But you did offer some good information.
Informative article, should be of interest to first time home buyers.Linda D
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