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Many people dream of owning a home, but it can be difficult to save enough money for a down payment and closing costs. Fortunately, federal, state and local governments offer a variety of programs to help people purchase their first home.

Federal Programs
The Federal Housing Administration (FHA) offers insured loans, which means that the lender will not lose money if the borrower defaults on the loan. FHA loans offer smaller down payments and lower closing costs than other types of loans and have competitive interest rates. Down payment requirements depend on the borrowers credit score.

The Department of Housing and Urban Development (HUD) sponsors the Good Neighbor Next Door program, which helps police officers, firefighters, emergency medical technicians and teachers buy homes. In regions designated as “revitalization areas,” buyers can receive a significant discount on the purchase price, as long as they agree to live in the house for at least three years.

The United States Department of Agriculture (USDA) also offers assistance to homebuyers. The USDA guarantees loans for homes in rural areas. The properties do not need to be used as farms. Income limits and down payment requirements vary.

Fannie Mae and Freddie Mac are entities sponsored by the federal government that offer loans to people with low- and moderate-incomes through local lenders. The loans are offered with low down payments and competitive interest rates.

Assistance for Veterans
The Department of Veterans Affairs (VA) offers home-buying assistance for active-duty members of the military, veterans and surviving spouses. The VA partially guarantees the loans and offers them with no down payment, no minimum credit score, no private mortgage insurance and competitive interest rates.

The VA also offers the Native American Veteran Direct Loan. The program helps Native American veterans and their spouses purchase houses located on federal trust lands. These loans do not require down payments or private mortgage insurance and come with low closing costs and fixed rates for 30 years.

Help With Home Improvements
Many people would like to make their homes more energy efficient to reduce their long-term energy costs. The Energy-Efficient Mortgage program allows buyers to make upgrades to improve energy efficiency without raising their down payments. The loans are insured through the FHA or VA.

Some first-time homebuyers look for inexpensive fixer-uppers. The Section 203(k) rehabilitation program, which is backed by the FHA, allows buyers to borrow money to make improvements and includes the costs in the total value of the mortgage.

Other Programs
Many states and cities also offer programs designed to help first-time homebuyers. You can learn about these programs by visiting your state or local governments website or talking to a local real estate agent or a HUD-approved housing counseling agency.

Research Available Options
Buying a first home can seem daunting, but it doesnt have to be. Several programs are available to help first-time buyers in a variety of circumstances. Explore your options to get help so you can be on the road to buying the home of your dreams.

Published with permission from RISMedia.

Most people expect to pay off their mortgage and live in their house during retirement. Unfortunately, life doesnt always go according to plan. If a homeowner dies before paying off the mortgage, it could have implications for the estate and the persons heirs. Discussing the future and preparing for that possibility can make the transition easier on family members.

Who Is Responsible for Mortgage Payments After the Borrowers Death?
After a homeowner dies, the loan still needs to be repaid. Heirs who were not party to the mortgage are not financially responsible for making payments, but those payments will still need to be made in one way or another to avoid having the house go into foreclosure.

If the homeowner has a surviving spouse who co-signed the mortgage, he or she becomes responsible for payments. Another individual who co-signed the loan will be responsible for making payments, regardless of whether that person has an ownership stake in the house.

If there is no co-signer, other family members can choose to take responsibility for the mortgage and refinance the loan to get better terms. If they’re unable or unwilling to take on the mortgage, the executor can use funds from the estate to pay off the loan, or the house can be sold.

If the house sells for more than the amount owed on the mortgage, the balance can be used to pay off debts or can be passed on to heirs. If the house is worth less than the amount owed, the executor may negotiate a short sale or allow the house to go into foreclosure. If the owner had a reverse mortgage, the loan will need to be paid off after all borrowers have died or moved out of the house. If family members pay off the loan, they can keep the house.

Estate Planning Options
If possible, the homeowner can set aside money in a savings account or another financial instrument that family members can access after his or her death. That will help them continue to make mortgage and tax payments until they decide whether to keep or sell the house.

Life insurance can provide funds that can be used to pay off a mortgage in the event of the homeowners death. That can allow heirs to stay in the house debt-free or to move out and start over.

In some cases, it might make sense to put the house in a trust or an LLC or to add relatives names to the title to avoid the time and expense of going through probate. It’s important to discuss the legal and tax implications with an attorney and an accountant.

Talk to Your Family
Death is inevitable. The better family members plan for it, the smoother the transition will be for surviving relatives. Whether you own a home or a loved one does, have an honest discussion and seek advice from professionals so you can make the best decisions as a family.

Published with permission from RISMedia.

How many times have you heard the story about people who move into their dream home only to find out that theres a huge plumbing issue or noisy neighbors next door? Learn from their mistakes, and reconsider certain factors before signing on the dotted line. Heres a comprehensive checklist for homebuyers when it comes to deal breakers:

1. Plumbing: If the plumbing isn’t working, guess who has to spend money fixing it? You got it: the person who signs on the dotted line. Plumbing issues can be even harder to address in older homes that have an outdated set-up. Be sure your inspector conducts a thorough evaluation before closing.
2. Electrical System: Whatevers not there has to be added, and whatever is not working has to be fixed. And since were talking about electricity, you could literally be playing with fire when it comes to outdated systems.
3. Roof: Here come the leaks. Or the potential leaks that will pop up after your first winter at the new place. You dont want anything getting in between you and your Christmas dinner, so make sure the home has a roof that is reliable and can be easily maintained.
4. Location: If you want a home by the beach, dont buy a home in the city. But departing from the obvious, keep in mind how noisy or quiet your street is, or how close your home is from the things that affect your lifestyle.
5. Layout: Similar to the location, you want to make sure your future house is laid out as close to what you had in mind as possible. If the bedrooms are too small to fit two kids per room, it will be costly to make those upgrades.
6. Placement: This detail is often overlooked. Your home might be laid out perfectly and in a location you approve of, but it might be placed too far or too close from the street. Your home could also be sandwhichedagainst another house, not allowing for any privacy, or it could be too secluded. Before buying, take a good look around the outside of the home, not just the inside.
7. Flooding: Make sure youre aware of whether or not your home is at risk of flooding, and dont dismiss this factor just because youre not close to a body of water. A slope in the road combined with a bad draining system can have your front porch swimming with the fish after a heavy rainfall.
8. Upgrade Restrictions: Dont get carried away with upgrade ideas before first double checking that there are no local restrictions. Ask the local municipality directly, given that the seller may not even know for sure.
9. History: In essence, make sure that your house has been patched up correctly through the years. You dont want to invest in a place that appears fine but may actually start collapsing after a few months.

Also keep in mind that the things that may inconvenience you now will also inconvenience a future buyer. Make sure youre not locking yourself into a bad deal.

Source: Zillow; LearnVest

Published with permission from RISMedia.

The Department of Veterans Affairs (VA) assists active-duty military members, veterans and surviving spouses who wish to buy a house. The VA offers loans with fewer fees and competitive interest rates that can help military families afford to buy homes in a variety of financial circumstances.

Eligibility
Active-duty military members, reservists, National Guard and veterans are eligible for VA loans. Spouses of military members who died on active duty or as a result of a service-related disability are also eligible.

Active-duty members of the military usually qualify after they have served for six months. Reservists and members of the National Guard are typically eligible to apply after six years, but they become eligible after 181 days of service if they’re called to active duty. If they serve during a war, active-duty members, reservists and National Guard members become eligible after 90 days of service.

To apply for a VA loan, the borrower needs to obtain a Certificate of Eligibility (COE). In many cases, a lender can obtain the COE on behalf of the borrower.

Loan Terms
A VA loan is issued by a private lender and is guaranteed by the Department of Veterans Affairs. Since the loan is guaranteed, the borrower is not required to obtain mortgage insurance. This can save military members and veterans hundreds or thousands of dollars every year. A borrower doesn’t need to make a down payment to qualify for a VA loan.

VA loans do require a one-time funding fee for applicants. The fee amount depends on the type of veteran and whether he or she is making a down payment. Fees for reservists and members of the National Guard are slightly higher than those for active-duty members of the military. The fee is lower if the borrower makes a down payment.

Although the VA doesn’t require a minimum credit score to qualify for a loan, individual lenders do have requirements. Borrowers must also prove that they have enough income to cover the mortgage payments, and they shouldn’t have too much debt. The guidelines are, however, more flexible than they’re for private loans. Lenders will consider a borrowers overall financial circumstances.

The amount an eligible veteran can borrow depends on the location of the house. A VA loan can only be used to purchase a primary residence, not to buy or refinance a vacation or investment property.

The VA offers assistance to borrowers who are having trouble making their mortgage payments. It can negotiate with lenders directly to help struggling borrowers. Veterans may be able to work out alternate payment plans or modify the terms of the loan to avoid foreclosure.

Valuable Assistance for Military Families
Veterans who have served their country are eligible for many benefits, including assistance with buying a home. The VA offers loans with many attractive features”such as no down payment, no mortgage insurance and competitive rates”that can save veterans thousands of dollars compared to traditional loans so they can realize their dreams of homeownership.

Published with permission from RISMedia.

If your credit score is low, it could be due to errors on your report. This is very common, and it can significantly lower your score and make it difficult or impossible to be approved for a credit card, car loan or mortgage.

If your credit report contains inaccurate information, take the necessary steps to dispute it and have the mistakes corrected. A credit repair company may be helpful in some cases, but it might not be necessary.

What a Credit Repair Company Can and Cant Do

A credit repair company can help you dispute inaccurate information. You can do that on your own as well, but if your report contains several errors, or if you have been a victim of identity theft and criminals have opened several fraudulent accounts in your name, it might be too complicated and time-consuming to dispute all of the errors yourself. A credit repair company can write to the credit bureaus on your behalf to dispute the errors and provide the documentation that is needed to correct them.

In most cases, a credit bureau is required to investigate a dispute within 30 days of receiving the information. That can help you correct mistakes and repair your credit score quickly so you dont have to put your financial goals on hold.

A credit repair company cannot remove negative information from your credit report if the information is accurate. Bankruptcies, liens and accounts in collection will stay on your credit report for several years, and there is nothing you or a credit repair company can do about it.

How to Find a Reputable Company

There are many legitimate credit repair companies that follow the law and respect consumers rights, but there are also a good number of scams. If a company promises to raise your credit score by a specific number of points, dont believe it. If a company tells you to dispute correct information, dont do it. It’s also illegal for a credit repair company to charge you before they complete any work on your behalf.

A reputable company should explain your rights and be clear about what they can and cant do to help you. They should listen to why you want to dispute information and request documentation to support your position. They should not promise you instant results.

Published with permission from RISMedia.