Just to be clear with you, I LOVE the internet.  It has made more information available more quickly than any public library ever could.  It has made shopping for homes easier and faster for home buyers, much faster than paging through those phone-book-sized “home books” that Realtors used 15 years ago.  But it has caused some problems too.

When we revised our First Time Home Buyer Class a couple of years ago, I went out and met with six different parties that had come to our class in the past.  I wanted to find out why they came to the class, rather than just gathering information on the WEB.  Everyone agreed that the internet was confusing.  All six parties HAD been on the web at some point in preparing to buy a home.   There was a lot of information, it was true, but some of the information was contradictory.  Some of the information was hard to understand and too complicated.  Some of the information was written in highly technical terms.  There was no way to ask questions and get immediate answers.  The consensus was that the internet wasn’t very user friendly.

These are the folks that then decided a class might be more what they were looking for and signed up for our seminar.  They all agreed that sitting face to face with someone and getting answers on the spot from knowledgeable teachers was far superior to reading information on-line.

The internet can be very useful.  We hope this blog is useful.  But it can be confusing, complicated, contradictory and too slow in answering questions.  If you need answers NOW and if you find the information you’ve been reading is hard to interpret, sign up for a class.  You’ll be glad you did!!

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

If you are a first time homebuyer and you wanted to take advantage of the 2009 first time home buyer tax credit, pay attention!!   As of this moment, there has been no extension of the $8000 tax credit by Congress.  It will expire on November 30, 2009.  That means that you have to purchase your first home and close on it BEFORE November 30^th. 

I have some advice for you.  Forget “short sales”.  They aren’t short and it can take as long as three or four months to hear from the seller’s bank, which needs to approve the sale.  You don’t have that kind of time.  Focus instead on foreclosed homes or seller owned homes.  The bank will respond to any offer usually within the week.  With a seller owned home, no short sale, you could hear in 24 hours.

Don’t wait till the last minute.  In this turbulent market, loans are more complicated, houses have more issues, and foreclosures add a whole level of complexity.  Plan to close by the end of October or middle of November.  If anything goes wrong, you’ll still have a cushion of time to make the deal happen.

Remember, it’s about the home.  It’s great to get a refund of $8000, but you still have to live in that home for 3 years or more for the refund to be permanent.  Don’t buy a home just to buy a home.  Make sure it’s the right one for you.  Don’t wait till the last minute and buy in a panic.  Homes in the lower price ranges are moving briskly.  Start shopping now and keep an eye out for new listings coming on the market.  They are more likely to contain “stars” rather than the “dogs” than have been on the market for months.

Shop smart.  Shop now.  Get the credit. Get a great home. Good luck.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Let’s start by explaining what a “closing” is.  When you buy a home, you have to pay for it.  When you sell a home, you have to transfer the ownership to the new Buyer.  The “closing” is when both of these things happen, usually at the same time.  The Buyer pays for the home by signing all the mortgage paperwork.  The mortgage bank then gives the Buyer the money to pay for the home.  The Seller signs title transfer paperwork which puts the house in the new Buyer’s name.  It takes about an hour.

As a Home Buyer, in addition to paying money for the home itself, you will have other fees to pay.  These fees are called Buyer Closing Costs.  These fees fall into four categories.

1.  There are loan related fees.  You will pay your mortgage broker a 1% origination fee (1% of the mortgage amount) and some other fees.  The other fees shouldn’t exceed $500-700.
2. There are title insurance and closer fees.  Your bank requires this insurance to make sure the title of the home is “clear” and no one else has a claim on the home.  The closer, working for the title insurance company, is the person who prepares and processes all the paperwork at closing.
3. There are miscellaneous taxes and fees.  The biggest tax is the mortgage tax which is a state tax.  This is $3.40 per $1000 of mortgage.  There are some courier fees, conservation fees etc.  These are all relatively small.
4. Finally, there are prepaid expenses.  Your bank will require you to buy and prepay for a hazard insurance policy for the first year on the home; and also pay another 2-3 months of hazard insurance premium  into a special savings account called an escrow account.  It will also require you to prepay 6-8 months of property taxes into this account.  Also you will be pre-paying the mortgage interest on the money you are borrowing through to the end of the month in which you close.  The bank uses the money in your escrow account to pay your property taxes and insurance policy when they come due.

These expenses total roughly 3-3.5% of the cost of the home.  As we have discussed in another blog on this website, you can usually negotiate with the Seller to pay these costs on your behalf.  However, these fees are a part of the usual and customary costs of buying a home.  Be sure to include them in your budgeting for a new home.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Did you know that one of the most powerful tools for first time homebuyers is right here? We offer free homebuyer classes in the Twin Cities MN. We’ve been teaching these classes for over ten years.  Hundreds of our students have graduated and had a successful experience buying their first home.  Our classes have much more to offer than any online class ever could because we tailor our classes to meet your needs! They are updated monthly as the information for home buyers changes.  Did you know, for instance, that there are special grants through Minnesota Housing Finance Agency for first time home buyers in Minnesota?  You can receive up to $14,999 to help with your down payment and closing costs.  There are also federal plans such as the time-limited $8000 first time homebuyer credit. There are also city and county sponsored programs, and many important details that our experts here can tell you about!

We have special homebuyer advice and ideas that you can tap into immediately. We cover an array of topics, including credit scores, mortgages, finding the right home, and much more! We also follow up with our students, sending you ongoing information after the class so that you’re in the loop for current home buying news and events. Visit our Signup page and signup for your free class today!

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.