NJ First-Time Home Buyers

Check out some of the content posted recently regarding South Jersey Mortgage and Real Estate News.

Steve Kappre is a Certified Mortgage Planner with Treasury Mortgage, a subsidiary of Aurora Financial Group, serving the South Jersey* area. Steve specializes in;

• All areas concerning First-Time buyers; First-Time Buyer mortgages, grants, down payment assistance, tax credits, police and fire loans, rehab loans for first time buyers, and more.

• Reverse Mortgages for seniors age 62 or older.

• Equity Management strategies for high-end homes and high net worth individuals.

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* We lend in all 50 states as well.

One of the most common questions in the mortgage world is in regards to first time home buyer mortgages and financial assistance for down payments and closing costs.

In South Jersey there are several down payment and grant assistance programs for first-time home buyers. A short discription of each is listed below.

As an example, each South Jersey County below has at least one grant program.  If utilized correctly, many buyers can get into a home with little or no money of their own. 

Burlington Cty Grant = $3,500 - $7,000

Camden Cty Grant = $5,000 - $10,000

Gloucester Cty Grant = Up to $10,000

Statewide NJ Grant and Down Payment Assistance

Known as the NJ Smart Start program, this program allows 2%, 3%, or 4% of the purchase price to be delievered as a grant to assist with closing costs and down payments.  For instance, on a $200,000 purchase, a first-time buyer* can receive up to $8,000 towards the purchase of a home. This program can be utilized with Conventional, FHA, VA, or even 100% USDA financing. Like many assistance programs, there is an income limitation depending on the size of your family. 

Other Considerations

Currently available is the USDA rural housing loan that offers 100% financing for designated areas. Concerning South Jersey, all of Salem County is applicable, much of Gloucester County, and a small portion of Camden County.  Qualifying borrowers can utilize county grant assistance, along with 100% financing, get a great rate, and have all of your closing costs paid. 

If you have been paying attention, mortgage rates are great right now.  Several days this week you could have locked a rate below 5%, depending on your scenario.  We haven't seen rates like this in several years. 

So who benefits from these low rates?  This article is not going to get into FICO scores and loan-to-values.  The people who benefit from low rates are primarily clients who have a solid working relationship with a mortgage professional.  Consider this scenario ...

1. 9:45am: Ratesheets show great pricing on mortgage rates.  Loan officer (L.O.) calls clients that could benefit from these low rates.
2. 11:15am: Client calls L.O. back to ask questions.  L.O. is on the phone.
3. 12:03: L.O. calls client back.  Client is out to lunch.
4. 1:10: Client calls L.O. back.  L.O. is in a meeting with a new client for the next hour and a half.
5. 2:50: Loan Officer calls client back, and finally gets client on the phone.  At this point, the market hasn't done well on the day and rates go up .25%.  Rates change daily, even several times a day.  In this scenario, EVERYONE loses.

So how can this be avoided?  By having a working relationship with the professionals you surround yourself with, in this case a mortgage professional. Imagine the same scenario above, BUT for each client that the loan officer is working with, there is a target rate/points scenario designated, so that the moment the ratesheet allows, the loan is locked in, in a matter of a few minutes.  Who wins then?  EVERYONE. 

There are a few reasons why this scenario isn't more common.  One reason could be that the client doesn't trust the loan officer enough to "commit" to this scenario, even though it is 100% free.  Another reason could be that the loan officer doesn't have this ideal scenario anywhere in his mind, so a pre-emptive strike would be impossible. The relationship in this case can only hope to get lucky.  It has been shown countless times that when the media reports low mortgage rates, it is almost always to late for the consumer to benefit.  Rates have already gone up to where it isn't beneficial to the consumer.

Mortgage professionals are just like realtors, lawyers, accountants, financial planners, etc ... there are tons of mediocre ones out there, some bad, and some really good ones.  Having a network of your own professionals, even as a regular 'ole Joe from Anytown, USA, you can bring about much more financial success for yourself.  By working with such professionals, you create a scenario where financial success for you isn't a flip of the coin.  It is a predetermined decision. It isn't a question of if the right scenario will come about, it is a question of, "Am I ready for that scenario at the drop of a hat?"

by Steve Kappre

Steve Kappre is a Certified Mortgage Planner in New Jersey and can be reached for more information at 856-419-3561 or via his Mortgage Website.

You have probably heard every side of the story ... Are we at the bottom of the market? Is it a good time to purchase? And countless others. If you have created a relationship with a real estate professional, one that keeps you updated on the market and relates it to your personal goals, then you may well know the right information that you need.  (If not, consider reading this recent article about the benefits of having professional relationships.) 

Here is a short list to help those on the fence to better know which side to fall on.

1. If you are a first-time buyer it is truly a no-brainer.  Mortgage rates are awesome, the government is giving $7500 tax credits for buying your first home (or if you haven't owned in 3+ years), and housing prices are the lowest in years.  As far as financing programs go, don't believe the fear the media protrudes.  There is 100% financing in many areas, and 97% financing in almost every single area, save the very high-end.  If need be, there are county and state grant programs in place to help with the down payment and closing cost requirements.  You may get in a home, literally, with $0.
2. If you are selling and purchasing the picture may be much better than you think.  Maybe you have heard it before; Real estate is relative. The fear of the recent depreciation of your current home, and having to sell it for less than you could a couple of years ago, can be replaced with the knowledge that the home you are moving up into is going to cost you that much less to purchase.  (Check out this great article about Selling Your Home in a Buyer's Market).
3. FHA down-payment requirements are going up on Jan 1st, 2009.  If you are truly on the fence right now, maybe the extra .5% will help you.  FHA down-payment requirements are going from 3% to 3.5%.  For some this is insignificant.  But for others, it is the difference between a new home and a new rental lease. 

Find a professional to give you straight, accurate advice. It shouldn't be your job to decipher what the real estate and mortgage market is truly doing. There are professionals to do that for you. You have your own career to deal with.

With the recent drop in interest rates, I thought it a good idea to give people a realistic idea of where rates are.  I rarely post rates, because they change daily, or even multiple times a day.  But with the government's $600 billion infusion into our Mortgage-Backed Securities (MBS), rates are significantly lower now then they were a week or two ago.  As always, if you have any questions, just drop me a line.

Mortgage Interest Rates*

Rates as of Monday, 1st December, 2008:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 30-Yr Fixed 5.375% 5.509% $5.60 5.875% 5.967% $5.92 NJ First-Time Buyer 7% 7.148% $6.65 7% 7.099% $6.65 100% Financing 5.5% 5.635% $5.68 5.5% 5.590% $5.68 15-Yr Fixed %5.375 5.604% $8.10 5.75% 5.905% $8.30

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Interest rates above are based on 30-day locks with one point. The conforming loan amount used for this ratesheet is $200,000 with a $250,000 purchase price. Non-conforming l/a of $500,000 based on $650,000 purchase price. Credit challenged, recent bankruptcy, first-time buyers, investment properties, and commercial financing also available. Treasury Mortgage/Aurora Financial Group is licensed by the NJ Dept of Banking and Insurance.