Is too much debt stopping you from buying a home? Here’s a plan to deliver you from financial evils.

1)  Cut your credit card habit. Take your credit cards out of your wallet, stash them in a safe place and start paying for everything with cash or your debit card.

2)  Prepare to make some sacrifices. Find ways to cut monthly expenses.  If you are truly clueless about how to loosen up more cash, here are some ideas. Give up cable television. Drop your gym membership. Stop eating out.  Trade in your car.  Get rid of your home phone.  Get a second job.  Make your own coffee, tea or favorite beverage.      

3)  Pay off credit cards using “snowball effect”.  Here’s how it goes:  Take the monthly amount of savings from item #2 above, and apply it to your smallest credit card bill each month until it is paid off.  Then, take the monthly payment amount of the card you just paid off, add it to the amount you are saving on other expenses that you cut out, and apply that amount to your next highest credit card until that one is paid off.  Continue this technique until all your cards are paid off. 

4)  Become a better manager of your credit cards. Transfer balances to a better card. Never forget to make an on-time payment. Don’t go overboard with spending. Be content with what you already have.  

If you need advice on how to improve your credit, go to our Website: HBDCLUB.com and contact us.  We will meet with you in person and show you what steps you need to take.      

Let’s start by explaining what a “tax credit” is.  If you have an $8,000 “tax credit”, that amount is reduced from the amount of taxes you pay that year. It’s like getting $8,000 cash!  If you don’t owe that much in taxes, you get a check for the difference!

Here’s the most recent First-Time homebuyer benefit that Congress has passed.  For homes purchased from November 7, 2009 & before July 1, 2010, first-time homebuyers get a “tax credit” equal to either 10% of the purchase price or $8,000 whichever is smaller.  Under this extended program, as long as a written, binding contract to purchase is in effect by April 30, 2010, the buyer will have until July 1, 2010 to close. Provided you purchase a home for more than $80,000 - you may elect to receive the $8,000 “tax credit”.  The definition of a “first-time” buyer is the purchaser or his/her spouse who hasn’t owned a home for at least 3 years prior to purchase. Eligible properties include: single-family homes, condos & townhomes.  

Not a first-time buyer, but a move-up buyer?  There’s good news for you too! Current home owners closing a home purchase between November 7, 2009 and July 1, 2010 are eligible for a $6,500 tax credit. They must have lived in their current home they are selling or vacating as their primary residence for a minimum of 5 consecutive years within the last eight.      

There are also income requirements - if you are single, the maximum gross income to qualify for the full tax credit is $125,000.  For married couples, the maximum is $225,000. Also, the homebuyer can’t buy the home from a close relative or non-resident alien. And, the homebuyer MUST use the property as their primary residence for at least one year.

If you sell the home before 3 years or convert it to a vacation or rental property,  repayment of the amount of tax credit is immediately due.  In case of divorce, the spouse that does not end up with the house is no longer liable for the repayment - only the spouse who keeps the house is liable.

So, basically, the $8,000 “tax credit” is free money from Uncle Sam!  This gift won’t be here for long. Take action today. Go to our website: HBDClub.com & contact us. We’ll help you buy before time runs out. Your New Home is Closer Than You Think!            

  - HomeBuyers Discount Club                

Since 1994, we’ve met with hundreds of First-Time Buyers to help them get financially ready to buy.  (In fact, that’s what our FREE GamePlan on our website: HBDCLUB is all about!) Many need to save more money, pay off bills, fix their credit and make better financial choices! If you live a thrifty lifestyle, as though you already own a home with a mortgage, you will be a successful homeowner! So, we thought we’d have some fun and make a list, in the format of the “Ten Commandments”, of the top ten recommendations we give to future homebuyers. So here goes.  We hope some of these will help you, too.  If you want to add any more, feel free!  We’re sure Ol’ Moses won’t mind!  

One.  Thou Shalt Not Buy or Lease a New Car.

Drive your old car until it’s paid for. Keep driving it for as long as you can. What’s the best car to own? The one that’s paid for! Car payments are the number one debt that reduces the amount of home loan you can qualify to borrow.  Buy your next car after you’ve bought your home!  (And, don’t buy new, buy a good used one.) Avoid leasing at all costs! Once you lease, you tend to always lease. Never-ending lease payments reduce your buying power, too!       

Two.  Thou Shalt Not Eat Out.  

Let’s face it. Eating out  at breakfast, lunch or dinner is a nice convenience, but it comes with a cost and greatly reduces your ability to save money.  Althought it takes time to plan ahead, DO IT!  Make your own meals to take to work or eat at home.  Even if  you’re single or a couple, it’s still cheaper (and healthier) to make your own food.  Sandwiches (like your mom made you to take to school when you were a kid) are still the best deal in town!  Also, try cooking with a crockpot. That way, you come home to a ready-to-eat, lower cost, healthy meal.  On weekends, barbeque for the week ahead or buy a whole chicken ($3.99) and roast it!  Yum!

Three.  Thou Shalt Not Buy Lattes at Starbuck’s.

Question: What do you call a non-fat latte made with skim milk and no sugar?  Answer:  It’s called a “Why Bother”.  (It’s just a joke, but there’s some truth here.)          

Many of us are into the habit of going to our local coffee house almost every day to enjoy our favorite beverage - coffee.  We know. We love it too.  It’s a relatively small price to pay to experience it’s captivating aroma, to feel it’s comforting warmth (it’s like having your very own personal fireplace) and last but not least, it’s great and satifying taste!  

But! But!! But!!!  Do you realize how much that non-fat, latte made with skim milk and no sugar costs?  3 bucks or more?  Add a muffin and you pay $6 bucks or more! Let’s see…5 days a week…every week…that’s over $1,500 a year…WOW!  Instead, why not buy a nice coffee maker and make it at home.  Set the timer, so the inviting aroma wakes you up in the morning!  Spend a few more minutes at home enjoying it before your day gets crazy!  Enough said.              

Four: Thou Shalt Not Have Two Checkbooks.

If you are a married couple, you should only have one checkbook.  At your wedding, when the preacher announced, “The two of you shall become one.” - he really meant your checkbook!  It’s much easier to be accountable to one another regarding the use of your money with one checkbook.  That way, every month, you can review your spending and savings together and find ways to make it better!  After all, your goal is to work as partners to buy your first home! All successful businesses run on one set of books not two!  Why should you be any different? 

Five.  Thou Shalt Put Away Thy Credit Cards and Make Thy Payments on Time.

When you get ready to buy a home, the lender is your senior partner. And, it’s time to make the decision whether or not to approve you for a loan, the number one factor considered is how you’ve treated credit.  PAY YOUR BILLS ON TIME! Here’s a tip: Set up an automatic deposit from your payroll into your bank account and authorize automatic payments to each creditor - that’s the easiest (and painless)way to pay bills.    

Do not use credit cards any more until after you buy your home.  Put them away.  No need to cancel them. (Cancelling credit cards may lower your credit score.)  If your spending habits are out of control, cut the cards up or place them in water and freeze them.  If you have the urge to use them, you must wait for them to thaw, and hopefully you will come to your senses!

Did you know that every $1 dollar you add to your monthly payments on credit, must be offset by $3 of additional monthly income if you don’t want to reduce the loan amount you qualify for?  In other words, if you add a $300 monthly credit card payment or car payment, you’d have to earn an additional $900 a month to offset that payment. Otherwise, you just cut back the loan amount you qualify for by about $50,000.  Ouch!

Six.  Thou Shalt Not Buy a Timeshare. (Nor Attend Presentation for Free Food or Gifts.)

Time shares and vacation clubs are financial traps that will limit what you can qualify to buy. For First-time buyers, they are wrong investments at the wrong time.  Plan to buy your first home before you plan to buy vacations.

Seven.  Thou Shalt Not Covet Thy Parents Home.

Your first home, most likely, will not be as big or as nice as the home your parents live in today.  It took them a long time of increasing incomes and many moves, to get there.  Their first home, I’m sure, was more modest than the home they live in now. Be patient, you’ll get there.

Eight.  Thou Shalt Not Buy Toys or Sparkly Things.

Be content with what you already have. Focus on savings & what it takes to buy your first home.  Resist the temptation of buying unnecessary toys like: motorcycles, boats, jet skis, electronics and vacations.  Watch your shopping for expensive clothes and jewelry too.

Nine.  Thou Shalt Not Take Trips to the ATM.

Take a look at your last banking statement.  How many ATM withdrawls does it show? If you have more than a few, your spending may be out of control. And, it is harder to take into account where the money went.  Build your budget and stick to it! 

Ten.  Thou Shalt Not Neglect Your Savings Account.

For first-time buyers, it’s nearly impossible today to buy with zero down payment. (It’s really not the best way to buy anyway.)  It’s always better to buy a home with at least 3% or 5% downpayment.  Plus, you must have enough funds to pay closing costs. So, let’s talk about a savings account. If part of your income is already being set aside each month in a retirement account, consider placing it instead into a savings account for your home purchase.  Re-start your retirement savings after you buy your home. 

If you don’t have a savings account or are not depositing a budgeted amount into the account regularly each month, set up an automatic deposit account from your payroll with your bank.  If you are not able to save money each month, how do you expect to pay for a mortgage that is much more than rent?  Do you live with parents or family and don’t have to pay rent?  Take advantage of their generous gift to you! Pay them fair market rent and have them put it into a savings account for you.  That way, you have a record of paying rent on time (the lender likes to see that) and you have a savings account too!      

We wonder what Ol’ Moses would say!

HomeBuyers Discount Club

For the 6th straight month, home prices continue to fall.

If you’re a buyer waiting to buy, that’s good news.  But don’t wait too long - you may miss your opportunity!

In many neighborhoods, home prices have already experienced their biggest price reductions - as much as 40% - and are at levels already close to the bottom.  With fewer buyers out there, sellers are more willing to reduce prices even further.  However, when more buyers decide to jump back in, competition to buy goes up, demand increases and eventually so will prices!

Here are the latest numbers:

The median price of an Orange County home (the price at the midpoint of all sales) was $520,000 last month (February).  This median price is down $125,000 (19%) from a peak reached last June.  February’s median level was last seen in April, 2004.

Last month: Riverside County’s median price (midpoint) dropped to $325,000.  San Bernardino County’s median price (midpoint) dropped to $290,000.  LA County’s median price (midpoint) dropped to $460,000.      

If you’re not getting yourself ready now - you may miss out!  Use this time wisely.  Take action and get financially prepared.  

The HomeBuyers Discount Club has successfully helped first-time buyers since 1994.  Make an appointment for a FREE HomeBuying GamePlan.  Affordable loans with lower downpayments are still available.  Find out your price range, which loan is best & how much money you need.  Need to save money or pay bills?  We help you get a budget started & show you how to stick to it.  You get a FREE credit report and how to improve your credit scores.  Wonder when you’ll be ready?  Our GamePlan calculates the day and date for you.  Ready to shop? Your loan’s approved before house-hunting begins.  We take you shopping for best buys until you find the right one. We handle the rest until moving day!   Here’s the best part - we give you thousands of dollars cash back from the commission we earn from the seller or new home builder.  Use it any way you wish!

Have you called us yet?

 - HomeBuyers Discount Club

Get ready. If you’ve dreamed of buying your first home, it may be your best time to buy.

Great news! Home prices have dropped so quickly and so far, the percentage of buyers that can afford to buy an entry-level home in California is increasing.

In California, this percentage stands at 33% according to the First-Time Buyer Housing Affordability Index.  Affordability percentages for condo buyers are even greater - at 42%.  As prices continue to fall, percentages will increase daily.

California is among the top 3 states to experience the biggest gains in affordability, partly due to increased foreclosures that have affected sales price values.

Interest rates have been steady or lower compared to late last year and are at historically low levels.  Lenders continue to offer loan programs to benefit first-time buyers.  It’s true they are tightening underwriting guidelines.  This means first-time buyers must go back to basic homebuying fundamentals - saving for a downpayment, keeping credit ratings in good standing with modest balances and income that’s steady and sufficient to borrow.

No doubt, there’s a definite “window of opportunity” beginning for first-time buyers.  

What are you doing to get ready?  We can help.

 HomeBuyers Discount Club