July 9, 2009

A Nasty Rumor Aimed at First Time Home Buyers

The rumor is home buyers who qualify for the $8,000 tax credit can use it as a down payment on the purchase of a home. SOUNDS FANTASTIC! So who is stepping up and loaning this future tax credit to the borrower? NOBODY! At least not in California. Being a mortgage broker associated with over 100 banks around the country and part of a vast group of fellow mortgage professionals (over 1,000) none of us has found anyone who is willing to monetize the tax credit. Nor have we found a mortgage bank allowing the tax credit to be used as a down payment.

This all began in May when HUS announced the $8,000 tax credit could be used for the down payment. The problem is, HUD brought this option to the table but didn't work with the lending industry to see it through implementation. Another example of our federal government in-action.

So if you hear a mortgage person or realtor tell you it can be done, be very very suspicious. Find out who is offering the loan, how much it will cost you and get it in writing. Then get a second opinion.