For first time home buyers, the American Dream Down Payment Act has made it easier to make their dream true of buying their own home.

A home is not just an investment but a personal joy and a stronghold that brings a sense of security to you and your family.

The good news is that the American Government has sanctioned $200 million for grants each year for the coming four years to low-income groups who want to buy their first home.

This certainly makes the castle in the sky closer for those who dream of buying their own home and are unable to do so because of the heavy initial down payments in the process.

Government Grants For First-Time Home Buyers

The Government has launched the American Dream Down Payment Initiative Grant for which it has tied up with banks to facilitate this process in order to boost the country’s economy by allowing more fluidity in loans to first time home buyers.

One of the best things that have come out of this is that there is no window for getting cheated because the state and federal agencies are the most credible people you can literally speaking, bank on as compared to any realtor or predatory loan shark.

Now, not only has the problem with the initial finance been obliterated but the interest rates with banks are also touching rock bottom and all financial assistance professionals are urging you to benefit of this wonderful opportunity.

Once you are in possession of your own home the equity in it can be the source of making the next down payment.

As this facility is not available to you if you are a first time home buyer and you don’t have any equity in property, the Federal Government has come up with this scheme of offering first time home buyer grants.

Not only are these grants a boon to making the payment but are also immensely practical in closing the mortgage.

In this case, even bad credit can’t be counted against you as you have not had in your own name any housing ownership within the last three years.

Tax Benefits

A substantial amount of tax savings can be generated through your mortgage interests too. If you are renting an apartment for a certain amount, the same amount when applied to your mortgage loan payment would result in a huge tax deduction as practically speaking, the preliminary mortgage payment is generally to cover up interest rather than actually paying off the loan and this interest is tax deductible.

If you are in the conventional 28% tax bracket with all the normal expenditure, this deduction could cause a major dent in your annual savings.

There are absolutely no issues and hang-ups and the only quantifiable point is that your annual family income should meet the stipulated minimum in order to receive the grant, which is calculated on the basis of income v/s dependents, the location of the home etc.

 However, not every state in the USA is offering this kind of a grant yet, though it is still possible to obtain a grant through federal assistance. It is important to note that each state has its own set of rules and regulations that apply to the grant program as instigated by the state legislature.

Why is this Free Money?

The government is labeling this money as free money because as there are no interests or monthly payments to be made it is virtually free, these funds remain mute as a second mortgage until they are repaid.

In other cases, they are simply forgiven like in the State of Wyoming; the government grant for first-time home buyers can be as high as $2,000 and is forgiven in the case that you reside in the house for a period of 30 years.

This differs in different states and some states offer a loan that turns into a grant after a certain period of time. Thus a loan calls for the amount to be repaid in installments even if it for a low interest rate.

However this is only a qualifying process for the mortgage and in most cases you receive a percentage of the mortgage amount making it all very easy in the long run.

Unmasking the Grant Availability

All this may be a little difficult to believe at first and reason dictates that this kind of money will be hard to obtain for the average seeker but in reality these grants are not highly advertised by the government and there are few sources that can give you the necessary data so the chances that you will have people queuing up outside these agencies and going away with pot loads of money is very, very slim.

Most of these agencies have not exhausted their capacity which simply goes to say that there is money available for obtaining that grant.

Lastly, a home is definitely high on the list of safe investments into the future as the escalation of prices for properties is constantly on the rise owing to growing population and economy that gives way to inflation that causes real estate investments to be stable if not a climber.

Now is the best time to take advantage of the extremely low interest rates and make good your dream of owning your home.

Rate Cuts and Grants for New Home Buyers

The seven-year high in first home buyer commitments showed the property sector would benefit from the government extending the increased grants until at least the end of 2009.

Don’t Bet your House – It Can Be Cheaper to Buy

A combination of slashed interest rates, increasing rents, falling house prices and generous first-home buyer grants means that for the first time in many years, buying has become an economical option.

By Jayashree Pakhare
Published: 4/20/2007

Many people can afford to buy a house if they have the proper resources and there are two conditions that should be addressed.

Firstly, you may need to repair your credit profile if it may have been damaged so that you are more appealing to home and mortgage lenders; secondly discovering a potential home seller that has common financial interests also helps greatly.

But after this, one of the most important questions is whether you have the necessary income to maintain the house after it has been purchased.

Before you buy your first home you should determine if you can afford the house.

If you begin viewing homes and find a desirable one, then when it comes time to look at your finances, you may think that there is no possible way you can afford it.

This may almost be a crushing emotional blow but you should not be discouraged.

Often there is another avenue that you may not have considered and instead of becoming sad about the initial bad feelings you should try again.

At this point, many potential first home buyers simply give up and think that it can’t be done for them.

But before totally abandoning the possibility of buying that first house, here are some points you should consider prior to concluding that house is not possible for you.

You may be surprised at how these small suggestions can help you in big ways.

One of the first things always suggested is creating a budget. Virtually no one likes to set a budget, but you should seriously consider doing this.

This will determine the money coming in and what you are paying out for daily living expenses and bills.

You need to know the amount of money you have to make payments on a home. Keep in mind that this number may include what you already pay in rent.

This will determine to a significant degree what you can afford when you decide to buy a house of any form.

One almost easy part of assessing your budget is to track your monthly bills and income. Generally, these are similar each month.

The hardest part of the budget tracking involves what you spend at any store and this includes purchases for items bought over the Internet.

You can use software programs to track your debit and credit card transactions or record them manually, but either way, it effectively makes it easier to find out where you are spending your money.

If you use credit cards to make purchases, you should track how much you are spending each month.

Is it greater or less than your potential monthly payment? The most difficult part of your budget is to assess cash based transactions.

You should retain all of your receipts or otherwise you won’t know where the money goes. Do this for one month and save all your receipts.

Once you have them in hand and review them, you may be quite surprised at how much you actually spend. After this, decide what items can be eliminated or reduced to allow for savings.

A home budget analyzer is a valuable tool that is virtually necessary.

This can be done using a simple spreadsheet and does not take much time to update every other day or even weekly.

Once you have this information in hand, the potential lenders you may encounter will appreciate this and be more receptive in you having prepared yourself.

Most potential lenders may only wish to know if you have sufficient funds for a down payment and can afford the initial series of mortgage payments.

Once they are satisfied with this, the remaining financial obligations are left to you.

An additional spreadsheet or personal financial profile will help in providing them with information about your personal assets and liabilities.

But this is not enough, because you must be weary that if they are providing you with the best deal, or simply attempting to earn their commssion.

The competition for your money is intense and you should not think that for even a moment that that they are attempting to do you a favor.

Rather, they want you money and may even provide you with a new Microwave Oven as a bonus.

So look around for a good rate or repair the credit rating you have before venturing into buying that first home or condominium.

In the not so distant past getting a free toaster was considered  acceptable, and for now at a bare minimum, a better interest rate is far more desirable.

Are Credit Scores Reliable Bases for Home Mortgage Loans?

Credit scores may already be obsolete and irrelevant as basis for evaluating people who are applying for home mortgage loans.

This informative video presentation outlines the recommended steps that first time home buyers should take, including what programs are available. This includes helping new home buyers learn about obtaining the best home mortgage, tax credits, grants, engaging real estate agents, down payment assistance programs and other useful information.

Hear what first time home buyers need to know about Hawaii mortgages. Marvin Galicha EasyMortgageHawaii.com 808-927-2935. Pitfalls Low Credit Ratings, Junk Fees, quick approvals, Pre pay penalties. Don’t miss out on the house of your dreams.

Click here for Part 1: www.youtube.com As the founder of Bello Mortgage, let my 11 years of experience and hundreds of resources find the best mortgage for you. The Canadian First Time Home Buyer video gives new home buyers the basics on what they should be expecting when they look to buy and finance their new home. This 2 part video looks at: -Application Process -Difference between Pre-approval and Approval -Different types of mortgages -Downpayment -Financing availability -Closing costs Click on the website for more. Free Legals, Appraisals & Bonus Offer if you state you found Bello Mortgage through YouTube. For more information or to receive our Free Newsletters, visit: www.mortgagespecialist.ca or call 604.303.9000 and talk to Pedro.

Click here for Part 2: www.youtube.com As the founder of Bello Mortgage, let my 11 years of experience and hundreds of resources find the best mortgage for you. The Canadian First Time Home Buyer video gives new home buyers the basics on what they should be expecting when they look to buy and finance their new home. This 2 part video looks at: -Application Process -Difference between Pre-approval and Approval -Different types of mortgages -Downpayment -Financing availability -Closing costs Click on the website for more. Free Legals, Appraisals & Bonus Offer if you state you found Bello Mortgage through YouTube. For more information or to receive our Free Newsletters, visit: www.mortgagespecialist.ca or call 604.303.9000 and talk to Pedro.

First Time Home Buyer Tax Credit Assistance and Federal Government Home Loan Program with Low Down Payment on FHA Mortgages. Buy Bank Foreclosed Homes at a Discount. Go To RealEstateMarketingThisWeek.com Part 2 (Excerpt) The median income family can afford twice the median priced home; prices drop over 50% And now I mentioned Dan Havey is back in the studio with us, Dan has done a lot of great things in the mortgage industry. He left us about a year and a half ago, is that right Dan? Yes, I left the mortgage industry in October of 2007. Tell us a little bit more about yourself. As you know I came originally from Wisconsin, where I got a degree in Business Finance and I came out here in 1989 and started working with my brother selling real estate owned-REO, bank owned properties for Fannie Mae, Countrywide, and the Resolution Trust Corporation-RTC which was the government entity that was put in charge of disposing of all the real estate owned by the 1800 S&Ls that had failed. I did that until about 1995 when I moved into the mortgage industry and there for 12 years I worked predominately with bankruptcy attorneys helping their clients get out of bankruptcy and foreclosure. I left the mortgage industry in October of 2007. Now I am working predominately in the arena of marketing for real estate and mortgage companies, helping out companies, just like Im here helping out Michael today, to get people to realize that right now actually is a really good time to buy.

Being a First Time Home Buyer can increase the difficulty in the process of obtaining financing, not only due to the lack of credit history but because of the inexperience and lack of knowledge on the field. Following, you will find some tips to help you get started.

The Down Payment Issue

A down payment in the range of 10% to 20% is usually required for obtaining a home loan to buy a house. There are also closing costs that you will need to pay in order to secure the loan.

If you add up these two factors, very few can afford putting down this much money. The financial industry, however, has found a solution to this problem and offers a different financial option.

Zero down mortgage loans are meant for those who cannot put away enough money for a down payment. With these loans you can finance 100% of the property value.

Moreover, for those who cannot even raise the money for closing costs, there are lenders offering 103% or 105% finance home loans.

The extra percentage is used for covering the closing costs which will then be included in the overall debt that you will have to repay in monthly installments.

Drawbacks of Lack of Down Payment

Zero down mortgage loans sound tempting but though not having to put money down in order to purchase a house can seem to be a fabulous waiver, it has many drawbacks and unless strictly necessary, it should be avoided by all means possible.

A down payment has not only direct positive financial consequences but it also can be a positive factor when the lender has to decide whether to approve your loan or not and on what terms.

When the lender has to consider your application, a down payment tells him that if you were able to save enough money to make a considerable down payment, you will probably be able to meet your monthly payments without any difficulty.

A down payment will also imply that you have the ability to obtain finance elsewhere and so, the lender will try to offer you a more tempting loan proposal in order to keep you as a client.

Those who can offer a down payment always get a considerably lower interest rate than those who cannot. As you can see, a down payment reduces dramatically the risk implied for the lender in the financial transaction, and thus, you will be able to get a better deal on your loan.

A down payment will not only reduce the interest rate you pay; it will also lessen all the other loan requirements and will turn the loan terms more flexible. You will be able to get stretchy monthly payments and larger loan lengths too.

Home Equity Loans

If you wanted to use that money for making home improvements or for other expenses, you do not need to worry. Once the deal is closed, the amount you had to put down will become home equity and you will be able to request a home equity loan for the difference between your home value and the amount owed on the mortgage.

These loans are secured and carry low interests; they are the perfect solution if you ever need the money you used for the down payment.

Even though buying your first home may be incredibly exciting, there are some things you should do before considering visiting any mortgage lender.

For many first time home buyers, this will be the largest investment of their life. But there is no disputing the fact that buying a home is a sometimes an emotional process because of the amount of time and paperwork that is normal with any home purchase.

Even if you are just venturing out to look at homes or if you already know what you prefer to buy, purchasing a home requires some research and effort.

Any time that you spend in the preparation is worth the effort because it will help both the lending and closing processes proceed smoothly.

Before you ever contact a mortgage lender, you need to go ahead and get a copy of your credit report. After you get a copy, double-check it for any errors or potential problems.

If you discover an error, you need to contact the creditor to make sure that erroneous items get fixed on your report.

Even if you have a low credit score, it does not mean that you cannot get a home loan, but you may have to pay a higher interest rate.

Organize your Efforts

After you have determined which lender you would like to deal with as well as the mortgage rates you anticipate getting, your lender will request a Verification of Employment form. What you can do is ask your human resources department to keep an eye out for this form.

Then you can rest assured that your very important document is not simply buried in in a stack of mail or on top of a fax machine. If human resources is expecting the document, they are much more likely to complete it quickly.

You will also need a minimum of one month’s worth of pay stubs or payment records from your present employer. Make copies of these and retain the originals.

Find the most recent W2 forms that your employer sent you for the last two calendar years. Your lender requires these wage and tax statements from you as well as from your spouse or other person with whom you are applying for the mortgage.

Find your federal tax returns and make copies of the documents. Use the two most recent years of tax returns if you have not yet filed your return for the the just-past calendar year.

Gather All Necessary Documents

There are more pieces of paperwork that your lender is going to need. Most lenders want at least three months worth of checking or savings account statements.

Also bring copies of any assets like retirement accounts, stocks, bonds, mutual funds and so forth.

Your lender is also going to have to confirm your identity, so that means that a copy of your driver’s license or passport is also needed.

The final thing that you need to do is to make a financial inventory. Calculate how much debt you owe and make a list of each account.

This includes all loans, other real estate purchases and credit cards. Your lender will ask for copies of statements of all of these accounts.

You will also want to determine how much money you will have remaining after you have paid the down payment and the remaining closing costs.

A copy of your social security card is also required. Gathering all of this paperwork really is the difficult part, so being proactive in gathering the necessary documents is of great benefit.

Tips for Choosing the Right Mortgage Lender

A decision that is almost as important as which house to buy is which mortgage lender to use. It is important that the entire transaction is handled efficiently and professionally.

Any one seeking to buy a new home this year is in a great position with respect to the housing market for first time home buyers.

With drastically decreasing property values, intelligent new home buyers can obtain a much better deal on a new house than in the past.

But with home real estate prices at a low, potential home buyers run the possibility of getting carried away and failing to properly research their home buying decision.

Those considering a home purchase should observe caution and take time to make an informed decision about purchasing the right home.

Potential buyers can begin their search for that perfect new home by creating a plan that covers all of the necessary components of home ownership.

Examine your Finances

All potential buyers should take a good look at their financial situation before pursuing home ownership.

While listed prices may be low, the monthly costs of home ownership can add up quickly.

Income, credit rating scores and recurring expenses should be taken into consideration when determining how much can actually be spent on a new home purchase.

Using a professional lender is one of the best ways to get an accurate profile for home purchase.

Shop Around for Home Loans or a Mortgage

Most home buyers will require some type of loan to cover the purchase of a new home.

Buyers should shop around for the best deal by contacting multiple lenders to compare interest rates.

The greater knowledge a buyer has with respect to the lending market, the better they will be able to negotiate for the best rates for a first time home buyer mortgage.

Search for the Right Home

Once a buyer has determined how much they can spend and has secured the necessary loans, it is time to shop for the right home. Any first time home buyer should list the various characteristics and amenities they would desire in their ideal home and location.

Often, a home builder will offer features on their websites that allow home buyers to choose their ideal home.

Confirm your Deal

After all the terms have been agreed upon and the documents have been thoroughly understood, most home buyers are ready to close the deal and proceed to the closing process.

But you should have already done your homework and prepared all the paperwork necessary to satisfy the lender.

If you do this properly and carefully, you will end up with the keys to your new home. To celebrate your new home ownership, you might want to consider throwing a party.

Not only for other people such as family or friends, but for yourself so that you personally confirm that you could and did buy that new home.