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Unbelievable Rates for Teachers and State Employees!

August 15, 2008

CalSTRS has two programs available to First Time Home Buyers, FTHB.

One is 97% financing program and the other is 100% financing program, however, the 100% financed program has fallen out of favor this past year due to the inability to find mortgage insurers and the housing decline. Not to fret, the 97% financing program is by far the better of the two.

The 97% financial program is an 80/17. The first mortgage is 80% of the loan amount and the second mortgage is 17%. The 2nd mortgage also can be deferred for 5 years at the exact same rate as the first!!!

For example, if you were purchasing a home for 300K, then the first mortgage would be 80% of that amount, or 240K. Just for argument sake, let’s say the rates was 6.5% on the first mortgage. Therefore, the second mortgage, 17% of 300K is 51K, would be at that same rate, 6.5%. Thus, you would be able to purchase the home at 6.5% and at 97% of the value!!

But Wait, The Program Gets Even Better…

You can defer the second loan’s payments for 5 years! You don’t have to pay the second loan for five years, but simple interest is added to your second mortgage each year at the same rate, 6.5%. So using the example above, the 2nd mortgage of 51K at 6.5% will accrue ~$3,315 the each year for 5 years, so ~$16,600 at the end of the 5 years will be added to the second for a total of ~$67,600. The loan is then amortized for the remainder of the 25 years at 6.5%. Your payment will be ~$456!!

Lastly, the program allows you to receive a seller’s credit toward the closing cost, so theoretically you are able to purchase the home for 100% financing. Also, third party members, such as Realtors and brokers are also eligible to credit toward the closing costs. In addition, family members can gift the 3% for the down as well. The above are all options for you to purchase your first home. Just remember, if you are placing an offer on a home, PLEASE, make sure your Realtor places within the contract the seller’s credit toward closing costs because it is difficult to back track once the offer is given to the listing agent or the bank, especially if it is a bank owned property.

We promise you  at Equistar Funding Corporation, you will not find a sweeter deal than this one…Please give us a call if you have any questions regarding the rates, or this FTHB’s program at 530.753.5657.

Also, for your convenience the rates are accessible by clicking the link below. http://www.calstrs.com/Members/Home%20Loan%20Program/rates.aspx

We look forward to talking with you.

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Who is Eligible for a First Time Buyer Loan?

August 9, 2008

First time home buyer programs are designed to help borrowers who may not have enough money to pay the full cost of the down payment or the closing costs on a mortgage. These programs make obtaining a mortgage more cost effective. There are even programs specifically for residents of each state. First time home buyer programs are available to those who have not owned a home for the past three years.
Generally the programs will have a step by step guide to get you thru the process of home ownership.

Some First Time Buyers Programs require as little as 3% down.

Some local First Time Home Buyer programs offer down payment assistance. To be eligible, applicants’ household incomes must not exceed an amount set by the program administrators. These income limits are usually calculated by multiplying the Area Median Income with a percentage (e. g. 110% of the AMI). The program administrator may place a lien on the home to prevent the homeowner selling the property for profit shortly after settlement. Such liens usually dissipate after 5 to 10 years.

First time home buyers may also have other advantages such as discounted transfer tax. Check your local and state regulations to see what benefits you may qualify for, make sure your mortgage professional is aware that you are a first time home buyer.

Some of the advantages define a first time home buyer as a borrower who has not owned a home in the past three years, others require that the borrower has never had any interest in any property.

A large amount of first time home buyer programs are FHA. Be prepared to spend a few hours in class so you can get a certificate stating your eligable.

Many other first time home buyer programs require that you either take a course or do a self study program with a workbook to learn about the responsibilities and financial obligations involved with owning a home. Even if these programs are not required by your lender or broker if is a good idea to do them anyway. Talk to your broker they can get you the information about when the classes are or provide you with a work book. Many of these courses and workbooks are provided through a PMI Company.

You may find that there are some mortgage loan programs, usually ones that the lender has a higher perception of risk, that are not available to first time home buyers.

A first time home buyer is considered somebody who has not owned a home in the last three years.

A numerous amount of people are eligble for for a first time buyer mortgage. Usually if you have never owned a home you are able to receive a first time buyer mortgage, in some states there are programs for first time buyers where a percentage of there closing cost are paid.

There are several first time home buyer programs where an entity can help provide the down payment for a home. There are usually certain income requirements to qualify for these progams.

First Time Home Buyer loan programs are often referred to by the acronym FTHB

There are many loan programs which allow First Time Homebuyers. Some may have stricter guidelines to qualify but in general are easy to qualify for.

To be a 1st time home buyer you can not be a home owner.

-Darin Zabel

530.753.5657

Dzabel@mortgageitdown.com

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