3 Personal Finance Hacks For Homebuyers

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3 Personal Finance Hacks For Homebuyers

The most intimidating part of buying a house, especially for first-timers, is without a doubt the financing. For most of us, it’s the biggest purchase we are ever going to make in our lives, which adds a certain amount of pressure. What few people know is that there are several programs in place to help buyers with the finances — if you know where to look.

HUD Homes

 HUD homes are houses owned by the US Department of Housing and Urban Development. They are acquired by the government during the foreclosure of an FHA-backed mortgage and can thus be eligible for FHA financing, whose benefits include lower down payments and potential financing for home improvements.

HUD homes tend to be quite cheap, and they can also help you save in smaller ways. For instance, HUD pays up to 5 percent of closing costs and your real estate broker will not charge you for placing the offer. The main downside of buying a HUD home is that they can be in a state of disrepair, but this makes it perfect for a first-time buyer looking for a cheap fixer-upper.

This detailed guide by Home Advisor contains everything you need to know about how HUD Homes work and how you could benefit from buying one. You can find HUD homes in your area on their official website or by asking your local realtor.

Special Loans

 FHA financing on a HUD house is just one of many special loans you can get to help you buy your house. Before you start shopping around for mortgages, check whether you are eligible for any of the following:

  • USDA Loan – Also called a rural development loan, this is similar to FHA financing but is specifically targeted toward people buying homes in rural areas. These usually have zero down payments and are even cheaper than FHA loans. Eligibility is for low and moderate-income families.
  • VA Loan – Loans by the Department of Veteran Affairs are offered to veterans, surviving spouses, and those currently serving. There are zero down payments and no mortgage insurance. Instead, a VA Funding fee — usually 15 percent of the loan amount — is the only extra charge.
  • Good Neighbor Next Door – A HUD initiative that offers a 50 percent discount on homes in revitalization areas for teachers and emergency service workers. The homes are only listed for a week, so you have to be fast and keep an eye on the official listings.

Credit Score Hacks

Your credit score makes a big difference in how much you will ultimately pay for your house. The better your score, the lower the down payment, the better the interest rate, and the more your bank is willing to lend you. For this reason, it is worth your time and some effort to boost your score as much as possible before applying for a loan.

To begin, you need to know your credit score (about one in three Americans don’t). You are entitled to a free credit report from all three credit report agencies every year: download them all to get yourself familiarized with the figures. Then, try some of the following techniques:

  • Reduce debt as much as possible — this is less of a hack than just common sense, but it will by far have the most impact on your score.
  • Increase your credit limits while taking care to keep your spending the same.
  • Ask a loved one with good credit whether you can become an authorized user on the credit card — also known as piggybacking.
  • Dispute negative information on credit reports if it is outdated or incorrect.
  • Add your rental information to your credit score.

 

A little bit of research goes a long way when it comes to financial planning, so take your time finding out what options are available to you. Don’t assume you are tied to a classic 30-year mortgage with a 20 percent down payment or that your credit score is beyond your control. Help is available to you: you just have to know where to look.

auhtored by: brittany fisher <brittany@financiallywell.info>

 

Making Home Affordable Allows Modification of Second Mortgages

Making Home Affordable Allows Modification of Second Mortgages
On April 28, 2009, the Treasury Department announced expansion of the Making Home Affordable Program to help reduce payments on second mortgages. The Obama Administration took this action because as many as 50 percent of all at-risk borrowers have second mortgages and without modifying them the borrowers remain at a higher risk of default. Under the Second Lien Program, if the servicer initiates a Home Affordable Modification on the first mortgage, participating servicers will automatically reduce payment on the second lien in accordance with complex, but uniform, program criteria. As an alternative, servicers may extinguish the second lien in exchange for receiving a lump sum payment. For more details, read the Treasury Department’s press release.

BREAKING NEWS: Short Sales continue into 2010

With the economy on the brink of recession, job loss at an all time high, foreclosures rising, inventory at still-high levels, and home sales sluggish, many current homeowners are asking for help. If a homeowner can no longer make mortgage payments, they are suffering some kind of hardship, and their home is now worth less than is owed, foreclosure or bankruptcy are not the only options. Call Gloria Benaroch for your options and contacts you can make.
 
A short sale, in real estate terms, is the sale of a house in which the sale price is less than what the owner still owes on the mortgage. It is a procedure sometimes agreed to by lenders, who would rather take a loss and get paid today than go through the lengthy and costly foreclosure process.
 
Without a short sale, if the property is sold, the Seller will have to to pay the difference between what was borrowed and what the property is worth today. This scenario has become very common in recent months as the real estate market adjusts and values declineand will become more prevalent as we enter into the new year 2010. Many homeowners purchased at the peak of the market, refinanced and the properties are no longer worth what was paid for them.

You are NOT ALONE!

Call and speak to Gloria Benaroch and see how she may help you or put you in contact with those that can.
 
A short sale will protect the property from being lost to foreclosure or bankruptcy and provides clients with the opportunity for a fresh start.
 
With the extended tax credit first time home buyers are out there looking. They need to be in contract by April 30, 2010.
 
stay tuned fro more information as I learn, experience and pass it on and ALWAYS consult your attorney, tax accountant etc.

 

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