My Recent Posts
- Buyer’s Optimism regarding real estate values in California- WAY UP! October 22, 2013
- B. Rich Realty September 2013 Newsletter October 11, 2013
- Buyers be forarmed with these Top 10 Overlooked Questions. September 24, 2013
- HOW TO BUILD YOUR CREDIT September 19, 2013
- WHY WE NEED TO BUILD CREDIT? September 11, 2013
In the early 1980s (ooops, I am disclosing my age) when I first came to America, I hardly heard of credit cards. In the Philippines where I grew up, the only “credit” being extended are loans from banks to fund real estate purchases or businesses. But, we had our own credit card version – we fondly like to call “gives”. “Gives” is basically installment payments. An agent of a retail store would come to a person’s work place each payday and collect the money owed for a purchase of jewelry or a dress. Usually the item purchased is paid in 4 to 10 “gives” (or 4 to 10 paydays). If you are an Adult Filipino reading this, you know what I mean.
After a few months in America, I had my first introduction to “Credit’. I decided to buy a car. I was surprised to find out that I could actually buy a car with only $800 down payment. The balance was to be paid by a loan. However, I was denied the loan because I had no credit history. The car dealership suggested that I get a co-signor. What is a co-signor? Well, someone that has a good credit and who will take over my loan payments if I become delinquent. My cousin’s husband boldly and kindly co-signed for me.
I started building my credit with the car payments, then I got a 76 gas card, a Broadway (now Macys) credit card, and finally a Visa credit card from my bank. Now, I am proud to say I have a credit score above 800 and made many “Big Item” purchases with my credit.
There are many reasons why we need credit.
Credit provides convenience. Just today, I was at Vons buying flowers for a friend. The only cashier that was open had a long line. The florist cashier was not open, but agreed to ring me up if I pay only with credit card. Yipee…I was in and out in 5 minutes and did not have to fall in line.
Credit allows you to buy big ticket items, you normally cannot afford. With credit I was able to buy houses, televisions, cars and many other items.
Credit provides access to the lowest interest rate (If your credit is good). I always had access to the lowest mortgage interest rate because of my good credit. With low interest rate, my monthly mortgage payments are low and my purchasing power is higher.
Credit allows you to earn miles and points for your credit charges. I have flown to Europe on my credit card points alone.
Purchases on Credit have insurance protection. Once I broke the crystal vase I bought with my credit card. I reported this to my credit card company and they reversed the charges.
Payment on Credit protects you from unreliable sellers or defective merchandise; If you have defective merchandise, the credit card will reverse the payment and not pay that seller.
So, if you don’t have credit, yet! Build one now! You don’t know how? No worries, my next blog will be about HOW TO BUILD YOUR CREDIT.
The reason I say the “Real Deal” is because back in the “glory days” of mortgage lending, a lot of loan brokers advertised their Option One Adjustable Rate loan programs as First Time Home Buyer loans at very low interest rates! Well, we know what that really meant: a) you (the borrower) pay a minimum monthly payment that did not even cover the actual interest due on the loan; b) no payment is applied to reduce your principal balance; c) the interest that you did not pay is added to your current principal balance (negative amortization); your interest rate went up making your monthly payment unaffordable; and lastly (lucky for you) the property values went down dramatically. Hence the housing meltdown of our Decade!
Now, let me introduce you to the “Real” First Time Home Buyer Program by the California Housing Finance Agency (Calhfa). Calhfa has adapted to the changes in the real estate market by introducing programs with tools for sustainable homeownership. It is designed to help well-prepared low and moderate income families become homeowners in California. It provides for down payment assistance from 3 to 3.5% of the loan amount.
B. Rich Realty is proud to state that we have helped several individuals and families purchase their first home with the Calhfa down payment assistance program. We could do it for you, too!
Here are some of the featured Calhfa loan programs:
California Homebuyer’s Down Payment Assistance Program (CHDAP)
- 3% down payment or closing cost assistance
- Deferred payment
- Up to 103% Loan to Value (LTV)
Calplus Zip Program:
- FHA insured first mortgage
- Up to 103% Loan to Value (LTV).
- 3.5% of loan amount in down payment assistance at 0% interest with deferred payment.
Extra Credit Teacher Home Purchase Program (ECTP):
- Rewards teachers and staff who serve in California’s high priority schools
- Downpayment assistance from $7,500 to $15,000.
- Deferred payment
- Interest forgiveness in three years
- Up to 103% Loan to Value (LTV).
You have to meet income qualifications and attend a home buyer education seminar.
The best part of all is that some if not all of these programs may be combined together (Calplus with CHDAP) and with other City and County First time homebuyer/down payment assistance programs.
MOST real estate agents or loan brokers are not aware or familiar with these programs. B.Rich Realty is experienced in this field, so give us a call with any questions you may have regarding the “REAL DEAL” First time home buyer programs. Visit our website (www.brichrealty.com) for testimonials. While there, scroll to the Newsletter section for articles regarding our clients who bought houses through the Calhfa loan programs.