Now should be the Time for First Time Home Buyers

The US government has cut their generous tax credit of $8000 when April of 2010 ended. Though in California, at the very least, first time home buyers, in good fortune, have another choice. The California State, as initiated by the legislators and Honorable Arnold Schwarzenegger, the first time home buyer’s tax credit was extended and expanded to $10000 at least until the end of 2011. This is indeed great news for Californians and the legislation actually covers not only the first time home buyers but also to all who purchase new or existing homes the coming year. This enticing incentive is to help reinvigorate the home-buying market that has flunked precipitously in the past few recent years due to economic recession.

For those who will purchase a home for the first time, there has never been a better season to purchase a home, though they have to expect what should be expected. The values of owning a home have dropped in California and the interests accompanying them are, at all times, lowers. The primary problem is still the availability of credit and the fact that lending institutions make it very much difficult for borrowers to pass the qualification. Though their behavior has been is considerable since if we can remember from the past decade that lending was too loose which led to the wave of foreclosures that have endangered the flow of the economy in the state. But, as aforementioned, lending institutions place a super tight restriction on approving loans. Most of those lenders require very high credit rating and steady employment as well as some assets.

Since this is the case, there have been a lot of assistance programs available for first time home buyers, especially in California that are well worth looking into. In the San Francisco Bay Area, great programs for the same cause have been collaborated on by cities and counties. Like in Alameda City, for first time home buyers, who have a total income of approximately less than 80% of the average income for the country, may qualify for a loan amounting to a maximum of $80,000. Plus, the payments are deferred for 15 years at which time there is a balloon payment due. 0 interest is charged for the initial 5 years, and, after that, the city or county takes a portion of shared appreciation. This is called a second position loan.

In Antioch City, where getting a huge home inexpensively, first time home buyers may qualify for down payment assistance up to $30,000. Again, you should expect a shared appreciation clause which permits the buyer to actually sell the house in the future and only pay a portion of the accrued appreciation equity back to the county or city.

Aside from the assistance programs by the city, the California State, under the CaHFA department, offers great assistance programs and one of which is CHDAP which will lend up to $15,000 as help for first time home buyers. Another good thing is that the programs are additive. You can even add Mortgage Credit Certificates which are credits of 15% of the interest settlements made on home loans. This definitely assists most borrowers to pass the qualification by effectively increasing their take home pay.