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October, 2000 Newsletter

+++++++++++ October, 2000 +++++++++++++++++++

Mortgage Rate Update: Window of Opportunity?
Recent Site Updates:
This Month's Tip: First Time Buyer Programs

Welcome to the October edition of the Home Buyer's
Information Newsletter.
Unlike autumns in previous years, we have found the level
of homebuying activity to be only slightly down from the
rather active pace of the spring and summer. Except for a
few areas in the U.S. and Canada, though, we are not finding
the inventory shortages that we saw previously. In most areas,
you will have a reasonable number of homes to consider and
the bidding wars that marked many negotiations earlier in the
year have subsided a good bit. This is good news for home
buyers, not so good news for home sellers.

Mortgage Rate Update: Window of Opportunity?
With 30 year fixed rates camped under 8.00% throughout
September and so far in October, this may be an opportunity
to apply and lock in a mortgage. Of course there is never a
guarantee that rates won't fall further, but with a number of
"questions'" on the horizon--economic data and a Presidential
election as examples--the current stability may not last. If you
are saving money for additional downpayment funds, now may
be the time to assess your situation to see if the downpayment
on hand and the mortgage payments available are a good "fit."

For more information on mortgages, visit the Mortgage
Section at:
Mortgage Information
Recent Site Updates:

You can always find out "Whats New" at the Home Buyer's
Information Center at the following location:
Site Updates

LendingTree Mortgages
LendingTree Mortgage In this volatile financial and interest rate
environment getting as many loan comparisons as
possible is crucial. At LendingTree you can submit
one simple loan request form and within a few business days
get up to 4 bona-fide offers from lenders competing for your business.
Get more information here.

This Month's Tip: First Time Buyer Programs

A frequent question that we receive at the Home
Buyer's Information Center is "How many programs
are available for first time homebuyers?"
The answer is two-fold: Hundreds and none.

Let me explain. There is a misconception that
there is some sort of national program directed toward
first time homebuyers. Some folks believe that this
is a grant program (someone gives you money for your
downpayment) while others believe that there is an
interest rate program (you get a special, low interest
rate because you are buying your first home). On a
national basis, unfortunately, no such program
exists. There are, however, quite often hundreds
of different programs available, but they are all
on a local (city, county or state) basis.

What, then, IS available for first time homebuyers?
There are often situations where a government body,
generally at the local level but occasionally on a
state level, will institute a program aimed at those
buying a first home. These may take the form of a
grant directly to the buyer, or they may have a
lower, or tiered (starting low and then increasing)
interest rate. They will almost always have restrictions
beyond just the first time buyer restriction. These
programs may, for example, be limited to those whose
income is under a certain level, or be limited to those
purchases under a specific selling price. Often, the
home purchase will need to be in a specific area--
at times even a designated neighborhood.

What Consitutes a First Time Buyer?

That will depend on the program in question. Some
will require that you have not had ownership in a
home in the last 5 years (or 3 years or 10 years or
some other term). Others will require that you have
NEVER owned a home. As with the other qualifications
above, each program will have its own specific
requirements regarding previous ownership.

Special Mortgage Programs

What mortgage options are available for the
first time buyer? In addition to any special and
locally administered programs, a FHA (Federal
Housing Administration) loan is often referred to
as a "first time buyer's mortgage." This can be
confusing, since FHA mortgages are available to any
home buyer financing under a specific loan amount
(which varies by location). Because of the lower
downpayment requirements of FHA mortgages (often
3%-5%), these mortgages have acquired the "first
time buyer" label. They can be an excellent choice
for those with limited funds for downpayment. Another
good choice is a VA loan for those with a Veterans
Administration certificate, since these mortgages are
generally available without a downpayment. There is
a discussion on the various types of mortgages that
are available at:
Mortgage Choices

Using IRA Funds for Downpayments

An advantage that first time buyer's enjoy but can
often overlook is the ability to make withdrawals
from IRA retirement accounts--without penalty--for
a first home. This is a great source of cash for a
downpayment, or to increase your downpayment to
achieve a lower monthly mortgage payment. There are,
of course, specific parameters for qualifying. You can
find more information on the site at:
Using IRA funds for a first home

Finding Available Programs

Where can you find out about the availability of
programs in your area? Your local housing authority
probably has some information, but since these programs
are usually administered by different departments (city,
county or state) and by different branches, this will
generally require a good bit of legwork. The Real
Estate section of your local Sunday newspaper will
often have stories relating to available programs,
usually when they are first announced. Another source
of information will be a Real Estate Agent in your
area, particularly one who works with a good number of
first time buyers, since they generally have access to
details on all current programs. You can find hints on
finding and evaluating Agents at:
Finding and Evaluating Agents

In Summary

Even though there are no universal programs directed
exclusively at first time buyers, you may be entitled to
the benefits of a specific program, so it is best to
investigate all possibilites to make sure you are
getting the best buying plan for your situation. This
may take a little of your time, but the rewards could
be considerable.


As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a
quick line.
or access our
feedback page.

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great October!

The Team at the Home Buyer's Information Center

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