PARAMOUNT MORTGAGE - LENDER'S BLOG

As we say goodbye to 2008 and prepare our new year’s resolutions, there are a few items of which you should take note for 2009.

First-time home buyer’s $7,500 tax credit – This credit will expire June 30, 2009. There are only six months left for first-time home buyers to take advantage of up to the $7,500 tax credit limit (or the less amount of 10% of the home purchase price) to buy a home. We have all the tax credit details on our website previously posted. Link: http://www.paramountmortgage.com/First-Time+Home+Buyer's+%247%2c500+Tax+Credit

New FHA Maximum Loan Amounts – Starting off 2009 the FHA maximum loan amounts for St. Louis Metro are:

• One-Family: $271,050
• Two-Family: $347,000
• Three-Family: $419,400
• Four-Family: $521,250

FHA 2009 Down payment is now 3.5% – FHA loans are still quite a bargain as down payments are only 3.5% for the borrower. Interest rates are at historical lows as we enter one of the best buyers’ market in years. An FHA loan is one avenue that allows deserving borrowers the ability to purchase a new home.

One of the great advantages of the FHA loan is that all of the down payment funds can come from a gift.

This allowance of gift sourced down payment funds are great for parents looking to help their children buy a home, relatives helping out family members, or even close friends helping out each other. Gift funds can also be used for a variety of needs during the FHA mortgage transaction including closing costs, prepaids, or points.

Increased emphasis on compliance in 2009 will require that the borrower provide proof of the source of these gifted funds. To prevent fraud for example, lenders will investigate the source to make sure the seller or realtor didn’t just give money to Mom and Dad to pass on to the borrower.

A gift letter, signed by the borrower and donor, can be used. It must indicate donor information including relationship to the borrower and a statement outlining that no repayment is required of the gift. The source of these funds must be verifiable usually by producing a bank statement from the donor. 

Using FHA backed loans is the smart way to purchase a home in 2009.