FIRST TIME HOME BUYER

For most people, buying a home is probably the biggest financial undertaking they will ever undertake.

Before raising a finger to look for the appropriate financing, first time home buyers really need to take the time to review their finances and see how much home they can really afford.

Budgeting for buying a home is trickier than it looks because if you put the cart before the horse, you may end up with unexpected expenses you did not budget for. The last option is to call a mortgage broker who can offer you creative options for financing your home and provide you with the means to buy more home than your budget allows.

First time home buyers need to have sizable amounts of money put aside for the purchase. Not only do you need to have a 20% down payment but you will need more cash for all the closing costs, inspections and every other little expense associated with the house buying experience.

Making the decision to buy a home can happen at any time. The choice can be triggered by the last fight with your landlord or it can be fueled by the desire to decorate your home without limitation.

However, the journey from Point A to Point B can be a long and winding road especially when putting a 20% down payment is the best way to kick off process.

If it is your long-term goal to buy a home, you need to save now to meet your future dream. Spending less than you earn and saving the difference may sound easy on paper, but making the efforts requires a lot of energy.

Consumers everywhere are being bombarded with information declaring that this is the best time ever to buy a home. Because of government cash incentives for first time home buyers, historically low interest rates, decreasing home prices and the plethora of options available, for many this is truly a once in a lifetime opportunity to achieve the American dream of homeownership. Before you take that leap of faith, you need to consider some factors do honestly decide whether you should buy a home or avoid the process altogether.

Factor: How Long Are You Staying in the Area?

Home shoppers who are interested in making the big purchase before the end of the year are getting another opportunity to finance their new home at extremely low mortgage rates. Recent reports indicate that for the first time in four months interest rates on traditional 30-year home loans once against dipped below the 5% point. Although the drop is significant, it still does not beat the ultimate low that happened earlier this year (2009).

Mortgage provider Freddie Mac made the announcement last week, where for the first time since spring interest rates were below 5% at an astonishing 4.94%. At one point in May of 2009, the rates were recorded at 4.91%. In the beginning of the year, some homeowners locked in mortgage rates of 4.875%.

If you have yet to take advantage of the tax credit for first-time home buyers, time is running out. The deadline to benefit from the sizable credit of up to $8,000 that was included as a part of the American Recovery and Reinvestment Act is November 30th, 2009.

While many have gone out and purchased homes to benefit from the credit, some have yet to do so. If you have been thinking about buying a home but haven’t, here are some of the guidelines for receiving the credit that you might consider:

• You (0r your spouse) can’t have owned a home in the last three years.
• There is an income limit: single tax payers – $75,000; married taxpayer – $150,000.
• For the credit, you will up to $8,000, which equates to 10 percent of the purchase price of a home up to $80,000.
• The home purchase date is considered the day that closing occurs and the title is transferred to the new owner.

Prospective home buyers — especially first-timers — have a lot of learning in front of them.

The world of real estate and home ownership are filled with complicated and complex terms, names, concepts and general jargon you’re never
going to hear anywhere else.

One of these names is the Monthly Treasury Average, or MTA as it’s called for short.

Definition of the Monthly Treasury Average

The Commerce Department released new numbers Thursday revealing that U.S. housing starts (i.e. the start of constructing a new housing unit, such as an apartment, house, mobile home, or even a group of rooms) saw an increase in August of 1.5% to a seasonally-adjusted 598,000 annual rate. While the increase in August didn’t meet economist expectations, it helped to offset the loss in June of 0.2%, which was the first after five straight months of increases.

Each month, the Commerce Department offers seasonally adjusted annual rates (SAARs) for “housing starts” as a way to gauge how many new houses are being constructed. The SAAR helps to decipher month-to-month data without allowing it to be affected by seasonal shifts that could create a sharp contrast in numbers. For instance, fewer houses may be built in the winter due to weather conditions. To account for the inevitable shift in new housing starts that may occur from November to December, SAARs are used to gather a reasonable average number each month.

If buying a home is on your agenda, you may fair well by first obtaining a little shopping advice to help you look in the right places. We’re not saying that you don’t know how to purchase your own house, mind you. But if there are some tips out there that can make the process a little easier, why not take them?

Tips that can help you on your house hunting:

To help stabilize the real estate market, President Obama passed into law a new stimulus act that will  give qualified first time home buyers a $8,000 tax rebate. If you buy a home between now and December 1st as a first time home buyer who meets certain criteria, that money can be yours.

Mortgage interest rates are at historic lows and that can save potential home owners tens of thousands of dollars over the lifetime of a traditional 30-year fixed-rate mortgage. Legislature has worked on improving communication between mortgage lenders and borrowers. Mortgage providers are now legally required to provide their applicants with a simple to follow “good faith estimate” so buyers can get a more accurate sense of what additional costs they may incur during the closing process.

The state of the real estate market is leaning in favor of buyers, many people are now in the position of deciding whether or not they should become first time home buyers. Although owning your own home can be a richly rewarding experience – providing a sense of accomplishment, the ability to decorate the interior in any color pattern you choose, and helping you get one step closer to realizing your American dream, there is a level of commitment associated with the process that may make renting more enticing.

Buying a home is an expensive proposition.  Property taxes, association fees, and insurance are all additional expenses you will be responsible for. As a renter you agree to a monthly rent, sign on the dotted line and you are locked into that price for a year or more, depending on the term of the agreement.