Cutting-Edge Mortgage Loan Programs and Strategies Home and condo prices have hit rock-bottom in the last couple years and you can find a great deal on a foreclosure, short sale, or bank-owned  property on every block in America. Due to uncertainty in the economy, the potential first time home buyer is looking for programs to keep their mortgage payment low. Also, most foreclosure properties need repairs and buyers want a program to roll the improvements into the loan. Finally, lenders have eliminated most zero down programs, except for the USDA and VA loans which still require 0 down payment, and most first timers don't have funds available for down payment and closing costs. The FHA 2-1 Buydown Program increases a buyer's purchasing power with a super-low monthly payment. The FHA 203k program allows you fix up a  home and roll home improvements into your mortgage. Finally, FirstHomeBuyers Down Payment Assistance Program and $8,000 Tax Credit may be the ticket to assist you with down payment and closing costs.

FHA 2-1 Buydown 30 Year Fixed Mortgage Program

As you can see, the total after-tax payment is $119 lower for 2-1 Buydown loan and in this case, you could purchase $20,000 more house for the same payment. The principal and interest payments on this loan will go up in the 2nd and 3rd years but will remain fixed at $1,105 for remaining life of the loan which is only $21 higher than traditional 30 year fixed. See chart below:

If you stay in the home 5 years, your average interest rate will be 4.90% which is below the current market rate of 5.25% for 30 year fixed.  This loan is a stable 30 year fixed rate program which allows you to qualify for the most home now and keep your payment very low in the first couple of years.  

FHA 203k Streamline Rehab Loan

You find a great deal on a foreclosure but the carpeting is trashed, the owner stripped out the kitchen cabinets, and it looks like the windows have been blown out by a drive-by shooting...now what? The 203k will allow you to purchase new carpets, windows, and cabinets and roll the cost into the new mortgage. This program only requires a 3.5% down payment and the loan is based on the value after making the improvements to the home. The minimum amount of repairs is $5,000 and maximum is $30,000. Most first time home buyers don't have the cash or don't want to use or have access to credit cards to fix up the property and the 203k Streamline loan can turn a handyman special into your dream home. Also, if purchase an FHA Foreclosure you may be eligible for $100 down program.    

FirstHomeBuyers Down Payment Assistance and $8,000 Tax Credit

Lenders have eliminated zero down programs and most first time home buyers don't have funds for down payment and closing costs. FirstHomeBuyers has a program which you can get up to $25,000 for the down payment and closing costs. Also, there is a $8,000 tax credit available to first time home buyers but you must close on your new home by 6/30/2010. Tick! Tock! FHA allows you to get a 100% gift from a family member or person with long-standing relationship. Let's think about this for a second. If you purchase a home for $150,000, then you would need $5,250 for a down payment. You could get a gift and give it right back after you get your tax refund and, in essence, you are getting a great 30 year fixed zero down program and you can utilize the rate buydown and get a super-low payment based on 3.50% rate (3.66% APR).  Can you beat that! Hurry, time is running out.      

Please contact Gerald Tribuzio, Wintrust Mortgage, at 847-516-5743 or email jtrib@firsthomebuyers.net for more details on these cutting edge mortgage loan programs and strategies as well as the FirstHomeBuyers Down Payment Assistance Program and $8,000 Tax Credit for first time home buyers.

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*Please consult your accountant for tax advice