If you have are a first time home buyer here is the best option. You want to go FHA as you generally will be able to finance up to about 97% of the closing cost so hypothetically you only have to bring 3%of your own money to the table. The thing with fha is that you have loan amount limits according to where you live. They generally vary according to the county you are in. Check out this website and find out how much they are where you want to live http://www.fhalibrary.com/fha_mortgages/fha_loan_limits/default.asp
Second, if you don't have the money for the closing costs which generally run about 3-4% of the size of the loan, then you should get help. How this works is this, by law you are supposed to bring 3% of your own money to the table. Well, lets just say you want to buy a house that is $200,000, you will need to bring $6000 to the table for the initial 3% to make 100% of the loan, and another $6000-8000 to the table for closing costs. What you want to do is get a seller's consession of 3% from the homeowner which is the most I believe FHA will allow and that should help you with the 3% you need. How this works is that instead of financing the cost of the home at $200,000, your sales price is now going to be $206,000 as the sellers will still get their $200,000 and you get closing cost help. Now this leaves you with the other 3% to 4% and that's where the concept of charitable gift foundation comes into play. They are in essence a loophole for the money you need to bring to the table. Let's just say you are broke. You need $12,000 to bring to the table for closing costs. What you and the seller agree to is that you will both work with a charitable gift foundation, check this link for info http://www.homedownpayment.org/002.shtml and what this pertains to is getting around the closing costs. By law, FHA says the seller can only contribute up to 3% if i'm correct. So, this gift foundation says ok, well i'll give the buyer the closing costs, if the seller gives me the $12,000 when he or she closes. So now, instead of financing $200,000, you are now financing $212,000 and the seller gives the gift foundation the $12,000 at closing. So, the gift foundation has fronted you $12,000, the seller still gets her $200,000 and gives the excess to the gift foundation minus a small fee of something like $600. Pretty slick, huh???
Now, if you want your first home to be awesome, check this out. IT is a program by FHA known as a 203K rehab loan. Here's how it works. Say a home in a nice area where the homes are going for $250,000 and this home you are looking at isn't selling because it is really run down. Say it's only $100,000, but with $50,000 worth of work it would be worth $275,000 here is what you do. Find a mortgage broker that can finance 203K loans, most can, but some just don't. Here is how it works. You say I want to buy this under an FHA 203K. This program is the same as FHA guidelines and the amazing thing is that you can roll all the improvements you want to do into one loan. Once you finance it under 203K, the lender contacts you and sends 203k consultants out to see what you want to do. So, you say I want to put on a new roof, put in wood floors, a new kitchen and repaint the whole house. They say, ok, well that will cost $50,000. They then say ok, after these improvements are done, your house will be worth $275,000. So, get this shit, you can finance all the repairs and upgrades and roll them into your loan up to 97% of what the fucking appraised value will be. So now, instead of financing 97% of $100,000, you can finance 97% of $275,000. YOu can upgrade everything you want as long as the loan to upgrade falls under 97% and is below the FHA lending limits. Can you believe this. You can have your first house be pimped out beyond all belief. And to top it off, all the upgrades you financed are a fucking TAX WRITEOFF. Can you believe this is legal. And what is even crazier, say there is a leak in the roof and the house is uninhabitable, you can finance up to six months mortgage to pay the mortgage while you aren't living there. Unfuckingbelievable. This is what I did to my first house. I bought a rowhome in a major city, paid $50,000 and put $50,000 into it. 5 years later it is worth $500,000 dollars. Not bad, huh?
Whats great about the 203k is that you can rehab your existing home with a 203k loan. It is unbelievable. You can roll all rehab costs into one refinance. Unbelievable.
good luck and email me if you have any questions.
sunfish@cyber-rights.net
Second, if you don't have the money for the closing costs which generally run about 3-4% of the size of the loan, then you should get help. How this works is this, by law you are supposed to bring 3% of your own money to the table. Well, lets just say you want to buy a house that is $200,000, you will need to bring $6000 to the table for the initial 3% to make 100% of the loan, and another $6000-8000 to the table for closing costs. What you want to do is get a seller's consession of 3% from the homeowner which is the most I believe FHA will allow and that should help you with the 3% you need. How this works is that instead of financing the cost of the home at $200,000, your sales price is now going to be $206,000 as the sellers will still get their $200,000 and you get closing cost help. Now this leaves you with the other 3% to 4% and that's where the concept of charitable gift foundation comes into play. They are in essence a loophole for the money you need to bring to the table. Let's just say you are broke. You need $12,000 to bring to the table for closing costs. What you and the seller agree to is that you will both work with a charitable gift foundation, check this link for info http://www.homedownpayment.org/002.shtml and what this pertains to is getting around the closing costs. By law, FHA says the seller can only contribute up to 3% if i'm correct. So, this gift foundation says ok, well i'll give the buyer the closing costs, if the seller gives me the $12,000 when he or she closes. So now, instead of financing $200,000, you are now financing $212,000 and the seller gives the gift foundation the $12,000 at closing. So, the gift foundation has fronted you $12,000, the seller still gets her $200,000 and gives the excess to the gift foundation minus a small fee of something like $600. Pretty slick, huh???
Now, if you want your first home to be awesome, check this out. IT is a program by FHA known as a 203K rehab loan. Here's how it works. Say a home in a nice area where the homes are going for $250,000 and this home you are looking at isn't selling because it is really run down. Say it's only $100,000, but with $50,000 worth of work it would be worth $275,000 here is what you do. Find a mortgage broker that can finance 203K loans, most can, but some just don't. Here is how it works. You say I want to buy this under an FHA 203K. This program is the same as FHA guidelines and the amazing thing is that you can roll all the improvements you want to do into one loan. Once you finance it under 203K, the lender contacts you and sends 203k consultants out to see what you want to do. So, you say I want to put on a new roof, put in wood floors, a new kitchen and repaint the whole house. They say, ok, well that will cost $50,000. They then say ok, after these improvements are done, your house will be worth $275,000. So, get this shit, you can finance all the repairs and upgrades and roll them into your loan up to 97% of what the fucking appraised value will be. So now, instead of financing 97% of $100,000, you can finance 97% of $275,000. YOu can upgrade everything you want as long as the loan to upgrade falls under 97% and is below the FHA lending limits. Can you believe this. You can have your first house be pimped out beyond all belief. And to top it off, all the upgrades you financed are a fucking TAX WRITEOFF. Can you believe this is legal. And what is even crazier, say there is a leak in the roof and the house is uninhabitable, you can finance up to six months mortgage to pay the mortgage while you aren't living there. Unfuckingbelievable. This is what I did to my first house. I bought a rowhome in a major city, paid $50,000 and put $50,000 into it. 5 years later it is worth $500,000 dollars. Not bad, huh?
Whats great about the 203k is that you can rehab your existing home with a 203k loan. It is unbelievable. You can roll all rehab costs into one refinance. Unbelievable.
good luck and email me if you have any questions.
sunfish@cyber-rights.net
