First Time Home Buyer Program Where Does The Money Come From

Izvor: KiWi

As a Santa Clarita first time home buyer, getting ready to purchase a house is an exciting time. Being prepared is crucial if you want the process to run smoothly. Knowing how much of a down payment on a house you will need and where it will come from is just one of the many things that you will need to consider.

Homeownership is not easy but it is worth it. For a first time home buyer looking to take advantage of building equity and having their very own piece of this world, there is much more than just being financially sound. You must prove to the bank that you are going to be able to pay the loan back and you must have a clean financial record for a few years back. Furthermore the term you choose and program you select will determine how much your monthly payments will be and how much of that payment will go toward equity. By being knowledgeable and better prepared, hopefully you will be able to purchase your first home without any surprises.

You can save with special tax credits, which first time home buyers are entitled to. Often, you can claim these credits on your tax return. This can lower your tax liability. Make sure to find out if there are any special tax credits that you can currently take advantage of.

If you live in California and you are a first time home buyer, there is plenty of money being provided by the state to help you purchase a home. California has a First Time Home Buyer program that offers reduced, fixed rate 30 year first mortgages to buyers that meet income and purchase price limits. There are also assistance programs that help the cash strapped buyer with the down payment, closing costs and prepaids.

The $8,000 tax credit is for first time homebuyers only. The IRS defines a first-time home buyer, according to the tax credit program, as someone who has not owned a principal residence during the three-year period prior to the purchase. The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer's principal residence within three years after the initial purchase. The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000. The tax credit applies only to homes priced at $800,000 or less. For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

In 2012, a survey conducted by Campbell Communications and Inside Mortgage Finance found that 53% of the first time home buyer population used FHA loans when buying a house. These loans are generated in the private sector but insured by the government, through the Federal Housing Administration. Thus, they are also referred to as 'government-backed' mortgages.