Information for First-time Homebuyers in Livermore!

It’s no secret that being a first-time home buyer in California can be a challenge. Our real estate markets move fast, and home buying competition comes from investors around the world. We saw rising home prices in Livermore during 2012.

In 2013, we have changes to mortgage guidelines that could affect first-time buyers, but there’s good news, too!

Let’s start with the FHA rule changes that are coming down the pike. In a nutshell these boil down to mortgage loans becoming a bit more expensive for first-time buyers, who often find FHA-backed mortgages to be the most feasible. You may recall from a previous blog post that the mortgage insurance premiums are also going up, and cannot be waived.

This cloud has a silver lining, however; Congress reinstated the income tax deduction for mortgage insurance premiums as part of the “fiscal cliff” tax package passed on January 1, 2013.  This applies to borrowers with incomes under $110,000. Bloomberg has an article with details, and of course you will need to consult your professional tax preparer.

Meanwhile, the Consumer Financial Protection Bureau created broad mortgage rules that eliminate no-doc, stated-income loans and crimp adjustable-rate mortgages.  As part of the new “Ability to Pay” rule, banks cannot qualify borrowers using an introductory interest rate. Debt-to-income ratios for borrowers cannot exceed 43%.  While the new rules are not effective until 2014, many lenders are expected to begin proactive changes this year.  Self-employed home buyers may have the biggest challenge..

And now, some good news!  There is help for low-income, first-time home buyers in Livermore!  The City of Livermore offers down payment assistance through the CalHome Mortgage Assistance Program. The program provides low interest, deferred payment loans of up to $40,000 to low income, first-time home buyers purchasing homes in Livermore. CalHome funds can be used towards a down payment and for closing costs. These loans are available now, but the fund is limited. First come, first served! Visit the City of Livermore website for an application.

Looking for more information about buying a Livermore home? Let me help you! I will refer you to reputable mortgage lenders in the area, and I can help you find the ideal home for your needs and budget. Please feel welcome to contact me for the latest home sale details in Livermore, Pleasanton or Dublin. I’ll answer all of your questions, and provide you with expert guidance for success!

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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