First-time Home Buyers are beginning to discover that now is a wonderful time to leave the world of renting and become homeowners. There are many reasons why the next six months will be "prime time" for this group who has largely been shut-out of the real estate market for the past seven years or so.
Let me be clear, this is not the time for folks who have poor credit, no job and no visible means of support... hopefully we will no longer see loan programs that allow anyone with a pulse to qualify. 
But if you are employed, have been paying your bills and have established a decent credit score, you may not only qualify but you'll find there are various programs available that may help you save big money. In addition, prices have been falling and will soon have reached a critical point of affordability: where the median home price meets the median income for New Jersey residents. And while Monmouth County's median home price is high, it's wonderful open space & beaches, great schools and proximity to New York make it highly desirable.
STATE FUNDED PROGRAMS
The New Jersey Housing & Mortage Finance Agency offers a below-market, fixed interest rate to first-time home
buyers. A first time buyer is defined as anyone who has not owned property in the past 3 years. Down payments of as little as 3% are required and must come from the borrower's own assets. Loans are 30-year fixed rate. Certain closing costs can be gifted by family members, non-profit organizations or government agencies. HMFA loans can be written as conventional or FHA loans. In addition, the HMFA has the Smart Start program which gifts the down payment to the borrowers, up to 4%. Visit their website for qualifying guidelines.
MORTGAGE PROGRAMS
Companies like Wells Fargo are helping first-home and other buyers afford a new home with creative programs such as their 3-2-1 Buydown. 
What is a Buydown? A regular temporary buydown allows for payment changes to occur once every 12 months (1% max per year) for the first 3 years; in the 4th year the rate is locked for the remaining term (i.e. it becomes a 30 year fixed rate at that point.) This 4-30 year fixed rate is confirmed when the loan is originated so you know up front what the rate will be. This is not a negative amortization loan.
Example: On a 3-2-1, assuming a note rate of 6%, the following would apply:
- Year 1 interest rate - 3%
- Year 2 interest rate - 4%
- Year 3 interest rate - 5%
- Year 4-30 interest rate - 6%
What is the cost? The cost of the interest rate buydown may be paid by the seller at the time of closing. The cost will be paid for from the proceeds of the sale of the home (as a Sellers Concession.) The cost of the 3-2-1 buydown is based on the mortgage that the buyer takes from the bank. A 3-2-1 buydown cost is approximately 4% of the mortgage amount.
Example: Loan amount of $300,000 at 6% = cost of $13,056 to be paid by the seller. Given the current market this may very well be an acceptable amount for the Seller to contribute as part of the contract negotiation. This is a direct savings to the buyer of over $13,000.
For more information, guidelines & restrictions about this program contact Steve DeLizza at Wells Fargo.
AVAILABLE HOMES IN MONMOUTH COUNTY
For a list of affordable homes in Monmouth County, visit my website and click the First-Home Buyers button on the left for homes listed for $350,000 or less. You can also search the MLS and create your own specific searches and save them in your password-protected account (free!) If you need help setting it up, just send me an email.
If you're interested in getting your search started right away, feel free to give me a call... I love first-home buyers!
