Home Buying Tips

More First-Time Home Buyer Tips

Many people wonder if they can buy a home in Boise if they have student loan debt, and a couple of days ago, I wrote an article giving first-time home buyers some information about some possible steps to being a home if they have student loans.

The blog post dealt primarily with some alternative means to getting into your first new home. To get you up to speed, you could, like many families looking to buy one of the Boise homes for sale in the area, get a loan from your family. Formalized programs exist that protect the person loaning you the money for the home and allow you to avoid some of the debt-to-income issues that may arise from having too much student debt.

Will Debt Prevent You From Owning Boise Real Estate?

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Usually, the tips for first time home buyers can include ideas like visit with your lender or have your home appraised. While these home loan ideas are certainly the traditional way of doing things, it doesn't mean they're the only way that you'll be able to buy one of those Boise homes for sale that you've got your eye on.

Not convinced? Recently, the LA Times ran an article highlighting a non-traditional loan program that's actually quite traditional when you think about it. Parents and other relative have started their own first time home buyer assistance programs, if you could call them that.

Problems Associated With Getting a Home Loan ~ Student Loans

If you want to buy one of the homes for sale in Boise and are fairly certain that you're

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Applying for a home for loan

There are many factors that lenders consider in determining how much, and what type of loan you may qualify for. Before taking a look at the types loans, it’s good to understand a few key principles that lenders look at.

Credit Score

Credit scores depend on which company is providing the scores (FICO up to 850, VantageScore up to 990). First knowing where your score comes from is important because banks are usually going to use the FICO score as the determining factor for the loan amount and interest rate. Generally, a great FICO score is considered 720-850, 680-719 is good, 620-679 fair, and anything below is 619 is considered poor credit.

Debt-to-Income Ratio

The debt-to-income ratio looks at your required

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HUD Homes are homes owned by the U.S. Government.  "HUD"stands for the U.S. Department of Housing & Urban Development.

How Do Homes Become Owned By HUD?

When a person buys a home using an FHA loan (Federal Housing Administration), FHA guarantees the loan against default for the lender (e.g. BofA, Wells Fargo, etc.).  If the homeowner defaults on the FHA backed loan and goes through foreclosure, FHA pays off the lender and HUD is given title to the property.

Who Can Buy HUD Homes?

Both owner-occupants and investors can purchase HUD Homes (as well as governmental agencies & non-profits).  Typically, HUD will review owner-occupant offers after a period of 10 days on the open market.  Investors offers are typically not considered for the first 30…

Many people are surprised to learn that "psychological impacts" are not required disclosures in Idaho real estate transactions.  For example, if there was a suicide or homicide on the property the seller is not required to disclose this.

Idaho Code Title 55 Chapter 28 governs psychological impacts on Idaho real estatetransactions.

Idaho Code 55-2801. Psychologically impacted defined. As used in this chapter, "psychologically impacted" means the effect of certain circumstances surrounding real property which include, but are not limited to, the fact or suspicion that real property might be or is impacted as a result of facts or suspicions including, but not limited to the following:

(1)  That an occupant or prior occupant of the real property is

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There's a new program by the Idaho Housing & Finance Association (IHFA) through its IdaMortgage loan program.  The Affordable Advantage Loan is designed for first-time home-buyers and has the following key features:

- First-time home-buyer

- No private mortgage insurance required

- Owner occupied

- Check the income limits chart for qualifications

- No sales price limits

- Minimum borrower contribution $1000

- Borrower must complete Home-Buyer's Education class

- Up to 100% Loan to Value for home-buyers with credit scores of 680 or higher

- Up to 97% Loan to Value for home-buyers with credit scores of 660 or higher You can contact a local IHFA Lender here to determine your eligibility.

The  above information is not guaranteed

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[UPDATE: TAX CREDIT EXTENDED] Time is nearing an end to take advantage of the first-time home buyer tax credit scheduled to expire December 1, 2009.  If you intend to take advantage of this opportunity and you're looking for a great buy, don't wait too long.

Many of the best deals out there such as the bank-owned homes are getting multiple offers.  It can take several (or more) offers on different properties before you end up with the winning offer.  This process can take anywhere from a few weeks to even a few months if you have you're very particular on what you're looking.

After your offer is accepted, you'll need about 30 days to close.  During that time you'll get your home inspection, appraisal, and final loan approval.  You'll want to have

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I'm often asked if Boise bank-owned homes or Boise short salesare better deals? While it can depend, and I've seen it go both ways, most often bank-owned homes are the better deal.

As some evidence for this, I pulled 11 Boise bank-owned homes that have sold since 8/11/09 and researched their marketing history.  All 11 of these Boise REO's attempted to complete a short sale prior to becoming bank-owned. As you'll see below, every home sold for less than what they had been marketed for as a short sale.

Boise Idaho Bank-Owned	Sold Reo Price	Short Sale Price	% Difference
10747 W. Parker Ave.	$93,000	$105,000	-11%
3975 S. Rushmore Way	$129,900	$149,000	-13%
7487 W. Snohomish	$145,000

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Looking for 100% financing? A rural development loan (RD Loan) is one of the few programs available to finance up to 100% of a home’s value. The loan does have restrictions, but if you’re thinking of buying a home in Kuna, Horseshoe Bend, Emmett, or Star Idaho it could be an option for you (see map below for eligible areas).

 

Benefits of a Rural Development Loan: - Up to 100% financing available. - No mortgage insurance. - Financing can include money for repairs and closing costs up to the home's appraised value. - Many eligible homes for sale in Star, Horseshoe Bend, Emmett, and Kuna Idaho. Both the property and the applicant must meet certain criteria to qualify for a Rural Development loan. This program was created to help moderate income…

The most commonly used approach when valuing Idaho income properties is the capitalization approach.  Most residential sales use the sales comparison approach by finding sold "comps".  The capitalization approach on the other hand looks at the potential annual net operating income and market "cap rates" to determine value.  Below is an overview of how this process works.

There's three parts to the formula: Income, Rate, and Value.  I remember this by thinking "IRV" and having memorized this formula:

Income  / Rate = Value

Step 1: Determine Income (Annual Net Operating Income: "NOI").

To determine a property's annual NOI, you'll take gross rents less expenses.

Here's an overview of how this looks:

A) Gross Operating Income:

- Less

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