HOME PURCHASE PLAN
The home I want:
Price: $0 -> $190,000
Ideal Monthly Mortgage (including taxes, PMI, HOA, & hazard): $1200 (max $1300)
Location: Surrounding Orlando Area
Square footage: 1700 s.f. +
Year Built: 2000+
HOA: $100/month max
* A-rated school district
* Quick access to major highways
* Good daycare
* Nice neighborhood
* Shower stall
* Large kitchen with pantry and lots of cabinet space
* Large master bathroom
* Walk-in closet in master bedroom
* Garden tub
* Family room and living room
* New stainless steel black appliances (a girl can dream can't she!)
Based on my research, an FHA would be the best loan for me to get. I chose to go this route because of the lower interest rate (currently 4.6%) and the lower required down payment (3.5%).
The following is basic loan qualifications for an FHA loan:
- Two years of steady employment (preferably same employer)
- Last two years of income should be same or increasing
- Minimum credit score of 580 and no more than 2 thirty day lates
- Bankruptcy two years or older (if applicable)
- Foreclosure three years or older with perfect credit since
- New mortgage payment < or =" to">
- 3.5% down payment
Here is how I stack up against the requirements:
- Two years of steady employment (preferably same employer). Check. I have 5 years of steady employment. Even though I have had 3 employers, they have all been on the same contract.
- Last two years of income should be same or increasing. Check. As most of you know I have increased my income by $25,000 over the past 8 months.
- Minimum credit score of 580 and no more than 2 thirty day lates. Check and check. My current credit score is 707 (Experian) and I don't have any late payments on my report.
- Bankruptcy two years or older (if applicable). N/A
- Foreclosure three years or older with perfect credit since (if applicable). N/A
- New mortgage payment < or =" to"> Check. The mortgage payment on my max price is 25% of my gross monthly income.
- 3.5% down payment. Almost there. The maximum down payment I am looking at is $6650. I currently have $3000 saved. I will have an additional $4050 saved by April, giving me a total of $7050.
I applied this past Friday and was pre-qualified for loan up to $300K.
I am looking into the 1st Time Home Buyer Tax Credit Program.
Facts on the programs:
- The tax credit is available for first-time home buyers only.
- The maximum credit amount is $7,500.
- The credit is available for homes purchased on or after April 9, 2008 and before
July 1, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
- The tax credit works like an interest-free loan and must be repaid over a 15-year period (starting two years after you buy your home).
I meet all the requirements to receive the credit except for the home purchase prior to July 1, 2009 but that is in the workings. I read through the FAQs on the website and it says that I can claim the credit on my 2008 tax return on a home I buy in 2009 (obviously as long as you bought the home before the last day to file taxes 4/15). If that is the case then I would be able to get an additional $7500 on my 2008 tax refund. I am going to confirm this on Monday and if everything is what it seems then I will most likely wait to do my tax return so that I can claim the credit.
I know some of you guys might have concerns or questions about my HPP so let me see if I can alleviate some of them. I expect the seller to pay all closing costs. I don't plan on buying a "handy-man" special but if the house does need any repairs then I will request that the seller have those handled prior to closing or provide a repair allowance to be given to me at closing. And I am not worried about having money right when I move in to furnish my house. Its not like I don't have furniture. I am hoping to close on a home by April 15 at the latest (my lease ends April 30th). I'll then have about 45 days until my 1st mortgage payment is due. If I needed to I could use the money I would be saving from having no mortgage or rent due. I also have a $300 deposit on my apartment that will be refunded and some others sources of income that will be trickling in.
Anyhoo that is my plan. Think its a stretch? You don't know me very well do you? I'll keep you guys posted.