How to Purchase Your First Home

Are you a first time home buyer?

Do you think you cannot buy a home because you don’t have the money for a down payment?

Did you know that there are programs out there that can help you get into a home with as little as $1000?!

So, you’re probably thinking…what’s the catch? There is no catch. Well, ok only two little things.

1. You must be a first time homebuyer.Which means, you can’t have owned any property for the last 3 years.

2. You have to meet an income requirement.

Many of the county programs have either a grant or a low interest, flexible loan to low and moderate income (80% AMI).For example, for a 2 person household, the income limit is $51,150.All occupant’s income must be counted whether or not they are on the loan.

Now, there are also additional down payment sources available that allow for higher incomes.For example, a 2 person household in Denver-Metro counties can make up to $76,700.

Most of these programs require that you attend a first time homebuyer class. These are typically offered for free if you take the class in person. During the 6 hour class you will learn things such as how to choose a realtor or lender, how to budget, what to look for when viewing homes, etc.

It is a class full of great information AND they even serve lunch!

Once you’ve completed the class, you will walk away with a Homebuyer Certification that proves you took the course.

If you are unable to attend the class in person, you do have the option to take the course online. Unfortunately, this option is not free, NOR does it come with a free lunch. Boo.

Cost for the online class is $99 for the first person and $49 for each additional person. Online classes come with a post-class housing counseling session which can be completed over the phone.

In other good news…Did you know that there is a program that will credit you 20% of the interest you pay on your taxes?

Yippe skippy!

A Mortgage Credit Certificate is a certificate that authorizes a qualified homebuyer to claim a percentage of the mortgage interest paid annually as a federal tax credit.

This is a dollar-for-dollar reduction of federal income taxes due. Lenders can look at this credit as income to the borrower. This can increase the amount of income a homebuyer has available for a monthly mortgage payment which can lead to a higher sales price.

What does this look like for you at the end of the year?

For example, a $200,000 mortgage with an interest rate of 4.5% will get a tax credit every year of $1800.

This credit continues to be credited every year you own the home and occupy it as your primary residence. Over time, this can really add up! Can someone say “mooo-lah!”

To see more information about the Mortgage Credit Certificate program in Denver check it all out here. Note that this program will run through December 31, 2017 as long as funds are available for it so if you have been thinking about purchasing your first home, don’t delay. Today is your day my friend.

In case you need a little reassurance about why owning a home is the best way to boost the green in your wallet, don’t forget these top 6 reasons according to Forbes.com.

1. Home ownership builds your wealth over time as you see the value of your home go up and get ahead of your loan. This is of course, as long as purchase a home you can afford.

2. You build equity every month. As you pay your mortgage bill each month you are working toward reducing what you owe on your home and this monthly reduction on your mortgage increases your equity.

3. There are mortgage tax deduction benefits to be earned. These include a straight up mortgage deduction, some closing costs deductions in the first year that you own your home and property tax is deductible.

4. There are tax deductions on home equity lines of credit. You can choose to shift your credit card debt to your home equity loan and pay lower interest than what some credit cards may offer.

5. If you live in your home as your primary residences for at least two years you qualify for capital gains exclusions.

6. Long term, buying is cheaper than renting. You probably already figured this out by now!

So if you are considering purchasing your first home, I would love to talk with you about the opportunities available for down payment assistance. There are so many options out there that can be available to you and every person and situation is different.

Happy home buying!

Ps. Enjoy your free lunch!