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Wednesday, May 29, 2013

Is There Really Such a Thing as 0% Down?

Is there really such thing as 0% down?

by Kelle Wirt

                For first time homebuyers, a real estate transaction can seem like a scary and daunting ordeal. One of the questions I get asked most often is, “Is there really such thing as 0% down for first time homebuyers?” Despite the old adage, “If it is too good to be true, it probably is,” in many instances, the answer is YES. In Texas, the two most utilized programs for first time homebuyers are the SETH program and TMP- 79. Even without these programs, interest rates are at a record low and home buying has never been more affordable – as long as you have a professional REALTOR® on your side who knows the ins and outs of these programs and knows you individually to provide you with the best assistance.

What are the SETH program and TMP-79 and how can they help first time homebuyers with 0% down?

                The SETH program provides down payment assistance and tax credit for eligible loans which include FHA, VA, and USDA-RD. There are some eligibility requirements and a course is mandatory.  Please see this site for more information. TMP-79 (“Taxable Mortgage Program”) is also known as “My First Texas Home.”  Provided by the Texas Department of Housing and Community Affairs, this is a relatively new assistance program to help with a fixed interest rate as well as closing costs. More in-depth information can be found here. 

What is the bottom line for a first time homebuyer?


                The bottom line for a first time homebuyer is this: you need a professional REALTOR® in your corner who will give you not only the information on assistance, but all the information to make an informed decision that is right for you. For example, while these programs are a wonderful way for first time home buyers to make an investment while the market is great but there can be reasons not to take them: later this year mortgage insurance premium (also known as “MI”) cannot be removed for the life of the loan unless a mandatory ten percent down was presented at closing as opposed to when the home reaches the 80/20 loan to value split and if you move too soon after the purchase of the home, you could be upside down. I will be happy to walk you through this information, as I have dealt with it both personally and professionally and know how confusing it can be. As your REALTOR®, I am here to provide you with the ability to make an informed decision, not to make the decision for you. Feel free to email me at kellewirt@gmail.com or call me at (830) 237-8463 if you are looking for a home in the Central Texas area. If you are looking outside the Central Texas area, please be sure to bring these and any questions up to your REALTOR®