Tapping the First-Time-Homebuyer Market
Many opportunities are out there for first-time homebuyers, and brokers can help navigate
By Justin Lopatin, mortgage planner, American Street Mortgage Co.
For many consumers, the
thought of buying their first home
can be overwhelming. They’re constantly hearing about how terrible the
housing market is and how getting a mortgage is becoming tougher than passing the
bar exam.
First-time homebuyers could have an
advantage in today’s housing market, however. First, there are low home prices and
a large housing inventory nationwide. In
addition, this past July, Congress passed
the Housing and Economic Recovery Act
of 2008, part of which is sure to boost the
first-time-homebuyer market.
Included in the housing bill is a $7,500
tax credit for first-time homebuyers. In addition, there is still a variety of available
lending options from which first-time
homebuyers can benefit, including Federal
couples who file jointly and have incomes
to as much as $150,000, qualify for the full
tax credit.
The tax credit will help first-time homebuyers by absorbing some of the expenses
that accompany homeownership and
providing a financial cushion. First-time
homebuyers simply claim the credit when
filing the tax return for that year.
It is important to remember and to remind your clients that this is not a grant
and that the money must be repaid — in-terest-free — over a 15-year period.
Housing counseling
The housing bill also allocates $150 million to states and communities around the
country to fund housing counseling for
first-time homebuyers and families facing
foreclosure.
Clearly, when trying to navigate
through a real estate transaction, education
is imperative. These classes and counseling can help anyone who would like their
questions and concerns addressed by an
unbiased third party. Purchasing a home
and acquiring financing is not something
the average person learns in school, and
even highly educated people are novices
when it comes to this topic.
Part of the reason so many homeowners are in trouble is that many had no
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“The [tax] credit is available
for homes purchased
between this past
April 9 and this coming
July 1. Single taxpayers
with incomes of as much
as $75,000, and married
couples who file jointly and
have incomes to as much
as $150,000, qualify
for the full tax credit.”
Housing Administration (FHA) and Department of Veterans Affairs (VA) loans.
And finally, interest rates are still low.
Here’s what brokers should know about
the various factors that can help them assist their first-time-homebuyer clients.
The tax credit
July’s housing bill implements a $7,500 tax
credit for qualified first-time homebuyers.
For the credit’s purposes, first-time homebuyers are defined as people who have not
owned a principal residence for three years
before the subject purchase.
The credit is available for homes purchased between this past April 9 and this
coming July 1. Single taxpayers with incomes of as much as $75,000, and married
Justin Lopatin is a mortgage planner with American Street Mortgage Co.
and specializes in working
with first-time homebuyers
and Federal Housing Administration financing. He
studied economics at the University of Iowa, and
before a successful mortgage career, he worked
for an options trading firm at the Chicago Board
of Trade. Reach him at (312) 376-3760 or
jlopatin@americanstreetmortgage.com.
