Home Buying in 32206>Question Details

Happyfeet, Home Buyer in 32206

Need help understanding how H2H, and FL ASST factor into loan.

Asked by Happyfeet, 32206 Thu Jul 9, 2009

Rec'd pre-approval for 125,000. Pls help me to understand how the H2H (12,500) and FL ASST (10,000) is paid back . I was a little disappointed to find my mortgage payments @ 6.25% would be 1,076 monthly (taxes and insurance included)....I am seriously having second thoughts and considering just holding off. Pls help.

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Keep in mind that your property tax payment may go down in Oct 2010. Most property for sale in Jacksonville is being assessed based on a higher sales price from the past. In addition, if the bank has taken over the property then it has probably also lost its homestead exemption. Once you close on the property you need to be sure your deed is recorded and file for your homestead exemption before Jan 1, 2010. If you do this, then when your property is reassessed for your Oct 2010 taxes the property tax may decrease. You should try to be proactive and get the city to reassess it sooner if possible. Property taxes are paid in arrears so your property tax at closing will be based on who owned the property on Jan 1, 2009. The seller will be giving you a credit at closing for their prorated portion and that money will be put in your prepaid escrow account for the taxes that will be due Oct 2009.

You can pull up properties you are interested in buying on COJ.net and find out what it previously sold for and how much the taxes are. This will help you determine if your taxes will be lower in the future. There is also a tax estimator on COJ.net.

Keep in mind that you are not making payments on any of your down payment assistance money and it is 0% interest. Your pre-approval sets a maximum loan amount you can afford but that does not mean that you have to purchase a home at that price. You can look for a less expensive home and your payment will be lower. If you sell or refinance your new home before living there for 15 years, then some or all of the down payment assistance will be paid back from the proceeds of the sale or refinance. Basically, that's free money, why would you consider turning it down? In additiion, you will be eligible for the IRS tax credit after closing of up to $8000. That should help you pay your house note until the property taxes are lowered.

In addition, there is a new product that you would probably qualify for that will give you up to $8000 more in down payment assistance and can be combined with the programs you have already. That would lower your payment by $50 more dollars. The FHOP money will only be available to the first 90 buyers that close on a home before the funds are exhausted, so time is of the essence. You can not register for it until you are ready to close on your new purchase.

The H2H program has a less than 1% default rate on their loans.

Have you chosen a Realtor to work with on your home purchase? If not, please feel free to contact me.
Brenda Gravitt CRS, GRI
Coral Shores Realty
bkgravitt@gmail.com
904-573-9638
0 votes Thank Flag Link Fri Jul 10, 2009
Sorry, I didn't really answer your question about how it's paid back. Your lender should be able to give you those answers, or it's available on the website. Just google First time buyer programs or H2H, etc. Basically it works like this. The bond is like a second mortgage that sits on top of your house with no payments and no interest. The time frame varies for each program, but after a period of time the amount is forgiven and you get away with the money for free. If you sell the house or refinance before the time period then you have to pay it back. The time frames vary from 3 years to 15 years depending on the product. The one program is a 4% gift and never needs to be repaid. Now matter how you slice it you win. The time frames are designed to prevent people from abusing the program and profiting off of it. The programs are really designed to assist people into home ownership and they really make a difference for a lot of people. Hopefully it'll make the difference for you between getting a nice house instead of an ok house and put you in the American Dream of home ownership. Do you realize how many countries do not allow their citizens to own property? We really live in a fantastic country (no matter what people say) and programs like these are designed to promote home ownership and allow lower income folks to start to accumulate wealth through home ownership and equity buildup.
0 votes Thank Flag Link Thu Jul 9, 2009
there is a 5.99% bond available as well as the new $8000 down payment assistance program (limited funds) that just became available this week. (in addition to the $8k stimulus). The H2H allows you to use a market rate loan and would probly save you some on your monthly note if you are able to get a market rate in the low 5's.
The Bond program isn't so much score driven so it's a good option for some people. If your scores are good it might be worth it to skip the bond and just use the H2H money and this other program as well. There's also a 5-1 matching funds grant available. Each of these programs aren't necessarily available from the lender you are working with. Certain programs designate certain banks to administer their particular program, so it's good to talk to an agent or mortgage broker that can steer you where it'll work in your best interests. Like I said, just because the money is available to you from a certain program does not always mean it's in your best interests to use it. If you can get the seller of the property to contribute closing costs, you can use that money to buy down your rate. H2H funds can't be used for that and I'm not sure about the bond. The seller shouldn't have a problem contributing closing costs and most of them are covered by those two programs anyway, so you'd be able to use it to buy down the points. Ask your lender about this and if they look at you funny, go get another lender. Banks need to compete for your business just like everybody else and if you sense that they are not fully knowledgeable about what's going on or if they are not working in your best interest....interview another lender. Don't worry about the credit hit for pulling a report: the algorithm that is used to score you considers all inquiries of the same type as one and doesn't penalize for multiple inquires as long as they are done in a 60 day period.
A 6.25% rate is a little high, but we have no idea what your credit looks like. The thing is that the bond rates are set and when these programs were set up, it was a competitive rate. Nonetheless, look into getting closing costs from the seller to buy down the rate. Keep in mind that using the bond program will allow you to come to the closing table with minimum (maybe none) out of pocket expense. Still a pretty good deal if you ask me. If the payment is too high, consider looking at a cheaper property. Don't hesitate: there is no better time to buy a house than right now. With the $8000 stimulus from Obama, you'll be able to pay the principal and interest on your house for an entire year (or more). Think about that....you'll live in that house for the first year for free (except for taxes and insurance)!!!!!!! And you need to think about this? Grab the money and run! Good Luck!
Web Reference: http://EricSellsJax.com
0 votes Thank Flag Link Thu Jul 9, 2009
Happyfeet,
As a follow up, there are limits/guides to many of the programs offering assitance to potential homebuyers. There are also class requirements that you have to attend for some of the financing.

Here is a link that may help you if you would rather not email....

http://apps.floridahousing.org/StandAlone/FTHBWizard/FTHBWiz…

This information was accessed from the website http://www.floridahousing.org which offers additional information. (See the First TIme Home Buyers Wizard!)

I can also get you in touch with a Wells Fargo rep that can help you with all aspects of financing assistance if you are interested!!
0 votes Thank Flag Link Thu Jul 9, 2009
Happyfeet,

Can you offer a little more information? Are you a first time homebuyer as well?

Fell fre to email me your info at thehayesteam@prudentialnetworkrealty.com. I will be happy to try to get you all of the info you need!

Thanks!
0 votes Thank Flag Link Thu Jul 9, 2009
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