FIRST TIME HOME BUYERS

Michael Holigan: As first time home buyers, Jamie and Dawn Wallace weren't sure what kind of mortgage loan to choose. They were considering a FHA loan when the builder of their new home stepped in with another plan.

Jamie Wallace: I was really concerned about how much we were going to have to have up front. That was our main concern. We were actually going into it with almost nothing. We've had a lot of bills that we've had to pay off and we've taken care of all of those. The way that they work everything it's step-by-step so that there's never a big lump sum that we're going to have to come up with, which has been really nice.

M.H.: There's several public and private programs designed to help first time home buyers. This aid comes in the form of grants, bond money and tax certificates. The most well known is the Community Home Buyers Program sponsored through Fannie Mae, a public corporation that purchases loans. Only a 3% down payment is required and the closing costs can be paid by someone other than the buyer. Another opportunity is through local and state government. They sometimes offer specially reduced interest rates through bond money. These loans can be easy to qualify for, but they do carry income restrictions. Grants are sometimes also available through public and private agencies. This is not money lent to you. This money is given to you for down payments or closing costs. Then there are mortgage credit certificates. They increase tax benefits by about 20% of your interest. The certificates require a lot of paperwork, but they're well worth it. Jamie and Dawn chose to take advantage of a special promotion from their builder that gave them $3,000 to buy down the interest rate on their mortgage.

J.W.: Having the extra money that they had fixed in for us to buy down the price of the house or the interest rate, was really beneficial for us. I don't know if we could have come up with some extra money to use to buy down the interest rate, which is what I think we're going to do.

M.H.: From the start, Jamie and Dawn's builder promised to help them find the best loan to suit their personal circumstances and the promise came with a money-back guarantee that would return their earnest money if they weren't able to find an acceptable loan. If you're a first time home buyer, you need to investigate what type of programs are being offered in your area. Do some legwork and talk with some lenders. The savings will be worth it.

 

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Episode 48 1996 - 97 Season

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