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First-Time Homebuyers
Did you know that you could qualify as a first-time
homebuyer if you were recently divorced or did not hold title to a
home within the past three years? It's true! There are several programs available to help first-time homebuyers
towards purchasing a home in San Diego! To qualify for some of these
programs here are some requirements - the maximum annual income before
taxes is $56,150 for a family of four. With a combination of a shared
equity loan, the tax credit program and down payment aid, qualified
buyers would be able to purchase a $370,000 home. Without these
programs, you would only qualify for $255,000. Click on each
link for more details.
1. San Diego Housing Commission Home Buyer Assistance Programs
2. San
Diego Community HousingWorks
Community HousingWorks is a San Diego non-profit that helps people
and neighborhoods move up in the world by providing a full range of
housing options combined with training and support.
If you are concerned about losing your job after
buying a home we now have for a limited time, a free
Mortgage Protection Program.
12 Ways to Obtain a Down Payment:
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Set up an automatic saving plan. |
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Get a gift from your parents, grandparents, other relatives or
friends. |
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Sell a car, boat, motorcycle, collectibles or other assets.
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Liquidate stocks, mutual funds, savings bonds or other
investments. |
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Allocate your income tax refund. |
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Take a loan from your 401(k) retirement plan and repay yourself
with interest. |
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Withdraw funds from your 401(k) plan, subject to taxes and
penalties. |
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Collect on a loan that you made to someone else.
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Get a bonus from your employer. |
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Explore homebuyer programs for public servants, if you qualify.
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Apply for a state or local government homebuyer down payment
program. |
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Use a private down-payment assistance program.
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Down Payment or Closing Costs?
Should homebuyers who have limited funds allocate more money toward
their down payment or set aside some share of the total for closing
costs? The simple answer is that the down payment should be the first
priority, up to at least 5 percent (or 3 percent for an FHA-insured
loan) of the purchase price. It doesn't matter if they have the money
for closing costs if we can't show (the lender) that they have the
money for the down payment.
If you've saved enough for a down payment, but not closing costs, here
are some options.
How to get closing costs:
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Ask the seller to pick up the tab. |
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Pay a higher interest rate in exchange for lender-paid closing
costs. |
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Wait to buy a home until you've saved more money. |
If you want the seller to pay the costs, you should discuss that
concession upfront before you sign a purchase contract because payment
of costs is a negotiable term that affects the seller's net proceeds
from the transaction.
Borrowers can reduce or even eliminate their closing costs by paying a
higher interest rate on their mortgage. This sophisticated strategy
should be discussed with your loan officer, but the basic rule of
thumb is that an additional 1/8-percent higher interest rate will net
a credit against closing costs equal to 1/2 percent of the loan
amount. For example, an additional 3/4-percent in interest might
eliminate closing costs of 3 percent. The catch is that as your credit
gets larger, it takes a bigger interest rate jump to achieve the same
amount of savings.
Instead of your total costs being 3 percent at one end of the spectrum
and zero at the other end with a 3/4-percent higher interest rate, you
could compromise on whatever combination of closing costs and interest
rate you want.
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Marcie Geffner is a freelance real estate reporter in Los Angeles. ~ |
