But can you really use it? Not so fast….
Federal Housing Administration (FHA) announced today that the first time home buyer credit of $8000 can be used as down payment in San Jose & rest of the Bay Area. If you are a first time buyer with limited down payment and you are the type who doesn’t read fine prints, it certainly is a great news. But I have my reservations - some serious ones. I see some very basic issues with the announcement which would either delay the implementation or may have limited benefits for a first time buyer or both.
Per the announcement, minimum down payment of 3.5% that needs to come from buyer’s funds (or gift) currently, will remain. Meaning you can’t use the $8000 tax credit against 3.5% downpayment requirement. The tax credit can only be used for additional down payment and/or paying for closing costs. Hence, it doesn’t help you if you were struggling with bringing that 3.5% down payment to the table. Read more..
According to DataQuick Bay Area home sales posted a year-over-year gain for the eighth consecutive month in April. Santa Clara county had 1606 sales in April 09 compared to 1440 in April 08 up 11.5%. Alameda county had 1457 sales in April 09 compared to 1240 in April 08, up 17.5%. The question is what is causing this robust sales. I guess, I gave away the answer in the post header.
Lets discuss the top 3 reasons one at a time. Read more..
In the summary of Fed’s late-April meeting released yesterday, there were some important pointers to the economy:
Fed officials saw the economy contracting between 1.3% and 2% this year and the GDP was only expected to advance 2%-3% next year. The Unemployment rate is expected to end 2009 between 9.2% and 9.6%, higher than what officials expected in January. Note that for Santa Clara County the unemployment rate at the end of March 2009 was at 10.8% and for Alameda county was at 10.5%. Read more..
So are you planning to buy a foreclosed home in San Jose with an FHA Loan? Foreclosed properties can be sold by 2 entities:
- Directly by the Mortgagee (The bank that held the mortgage), or
- By entities that purchase foreclosed properties either singly or in bulk for resale
FHA has a property flipping rule that says that the new owner has to own the property for 90 days before he/she can sell again. FHA on Friday 5/15/2009 extended it’s Property Flipping Waiver to 5/10/2010. Meaning, a bank can foreclose on a property today and can sell it tomorrow without waiting for the mandatory 90 days seasoning. Read more..
If you are planning to get a Home Loan in Bay Area, you should be aware of the 4Cs of Lending.
Capacity
Lenders usually look for a minimum of 2 years of work history in the same line of work. Any employment gaps or extended time off must to be explained. If you had a recent job change or if your income is derived from seasonal work, your income may be considered for qualifying purposes in certain situations. However, less than 2 years of work history may be acceptable if you have been studying and your current job is related to the subject you graduated in.
Read more..
