Be a good American: Buy a home and get free money while supplies last!

Mortgage and Lending with Choice Finance Corporation

"I'm a first time home buyer, I'm trying to buy a home soon to take advantage of the first time home buyer $8,000 tax credit" That statement ranks in the top 3 things I hear everyday. 

#1 is "I'm upside down on my mortgage, HELP!"

#2 is "I'm not your maid, put your clothes in the hamper" (I did not say that my top 3 are all business related)

So I digress back to the point of this post. Now is a great time for a first time home owner to buy a home. Prices are low, rates are lower, sellers are paying closing cost for you and the government is chipping in up to $8,000. Even with all of this, you still need to assess whether or not you can truly afford the home that you may purchase (Hurry this offer expires at the end of the year) . Is it the right thing to do, is now the right time? Let's take a look at how it may breakdown:

I serve the DC metro area- so I am going to use figures that I know are common for the DC Metro Area. Let's say that you are currently  renting an apartment for $1400/ month and you are comfortable with this payment.  You would want your payment to be in this ballpark for your new home. Let's try to figure out how much house you can afford:

I would start by estimating about $350/month for taxes, homeowners insurance and mortgage insurance.

Now you need to figure out about how much your principle and interest payment will be. To do this, you need to play with some loan amounts and interest rates. You can do this on my site I post rates daily and offer a simple mortgage calculator.

Today, you can obtain 96.5% financing through FHA at 5% fixed interest rate for 30 yrs.  We are targeting a principle and interest payment of $1050/month to get to a total payment of $1400, which is the comfort level that we have established for this scenario. With a few clicks I determined that a $200,000 loan at 5% would give us an estimated TOTAL payment of $1424/month. This is right where we want to be. Now can you find a home in Maryland, Virginia or DC $200,000? Click here to find out 

Surprised at what you found? Now that we have determined what you can afford, lets go over the benefits of home ownership. In this scenario, the buyer would be paying $16,800 in rent annuallu vs. $17,688 annually to own. The figure to rent will not change, the rents are not tax deductible and the government is not going to stroke you a check for renting. Let's figure the benefit of owning.

#1 You get to deduct the interest paid on your mortgage from your tax return. For this loan, the total would be about $9996 per year in tax deductions. As you may well know, the average person gets about 25% of there deductions back in the form of a tax refund. So now we have saved $2500 on taxes.

#2 You may be eligible for the $8000 first time home buyer rebate,  now the savings rises to $10,500. This would bring your 1st year out of pocket expense to about $7200. Which is more than HALF of the cost of renting.

#3 You get to own your home, you can make the walls whatever bright tacky colors you choose and not have to answer to anyone about it.

Even after year 1, you would still be saving money by purchasing vs. renting. Click here for more information on the first time home buyer tax credit.

The bottom line is, the government has made purchasing your first home a very attractive option right now. Not only will you own your home, it could actually save you money. Go to to browse listings, and check out for daily rate updates

Josh Burley
Sr. Loan Officer
Choice Finance Corp.
301.881.8900 x125

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