Home Buying Urgency

The average home buyer is likely unaware of two major home buying opportunities they have and are about to lose one of them. For some time, buyers have been availed with what is known as "Down Payment Assistance" programs. Like many positive programs, DPA's have been abused. Lenders have directed buyers into this program which has allowed the seller to gift the buyer with the down payment. Borrowers were loaned the remainder of the sales price. This process equated to no down payment on the buyers part. The intent was to help deserving buyers obtain home ownership. Regretfully, abuses of this program allowed unqualified buyers through the aid of inflated appraisals to obtain financing which ultimately led to accelerated levels of foreclosure. In turn, significant losses contributed to the house financing industry dismal state. Abuses of a well intended program that was highly beneficial to many deserving buyers has gone under fire. October 1, 2008 is the deadline for the DPA program. Some lenders have stated their particular policy is a loan must be "locked in" by late August in order to receive this very meaningful benefit. For example, if a prospective buyer was considering a home with a sales price of $140,000., the 3% down payment ($4,200) could be a gift. The seller would make a donation of that amount to a third party company who would give it back to the buyer. The buyer would then be approved for a 97% loan allowing the buyer to purchase a home without any money down. In less than 6 weeks, many potential home buyers will be eliminated from the buying pool due to not having a down payment and no means for them to get it. Essentially, many home buyers are about to lose a major amount of cash that they will not have to repay if they don't act soon.
On a brighter note, the President has signed into law a TAX CREDIT bill that is intended to stimulate home sales. This is a very liberal bill that will pump a staggering amount of money into the housing market through this "credit". Interested home buyers should do their own research through their financial adviser, tax consultant, etc. to understand the impact it will have on them. A basic overview of this bill is that it is intended to bring first time home buyers into the market . First time home buyers are defined as anyone who has not owned a home in the past 3 years. Income limits do apply but they are very liberal and many American taxpayers will qualify. If a single person or couple is within the income limits, they will receive $7,500 through a tax credit. Unlike previous tax credits that were only applied to a tax liability, the buyer receives $7,500 even if they do not owe taxes. For example, if a buyer is entitled to a $2, 500 refund, they receive $10,000. A buyer that owed $0 taxes would receive $7,500. This credit is in reality an interest free loan. It is to be repaid over 15 years so if a buyer does receive the entire $7,500 they will repay at the rate of $500. per year. I don't know about you but anytime an interest free loan can be obtained and repaid this painlessly, I don't see a down side.
The preceding two topics are real and should prompt anyone considering buying a home to make it an immediate priority. For those readers in the middle Georgia area, a great selection of high quality, affordable new homes can be found at http://www.homesbydreamworks.com/.
This article is written to provide the reader with topics to investigate and verify on their own. All of this information comes from sources deemed reliable. The writer is not offering any form of tax advice but advising such information exists and they should consult sources from which they have confidence to verify the opinions expressed within. Concerned parties in the middle Georgia market can go to the website and request via email local sources that can be used.