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Telecommuting News | (Net)Working Moms A Woman and Her MoneyA Little Chat with Millie the Mortgage Brokerby Aikya Param Q. Have you noticed more women buying homes in recent years? A. Women who are separating and divorcing are now far braver, and more able to buy homes, to buy out their husbands or partners. Or, they are buying their own homes (after the sale of the home following divorce). It is not that I want to work with divorce, but I do help a lot of women in that situation. I also work with family law attorneys to help educate them about real estate financing, so that women can have their divorces structured to help them qualify sooner. Q. What government programs are available to make it easier for women to buy their own homes? A. There are several: the Community Home Buyers Program and the Mortgage credit Certificate Program are the most notable. The Community Home Buyers Program is not just for first time buyers. It allows for a low down payment of 3% and serves low to moderate income people. That goes to the high end of moderate, $45,000 to $60,000. It provides looser underwriting guidelines and alternative credit. That means if a woman doesn't have credit in her own name, they will look at payment records for rent, telephone, and utility bills. This program also allows for a higher debt. The Mortgage Credit Certificate Program was established by the Tax Reform Act of 1984. It gives first time home buyers a tax break. Home owners could already claim a deduction for mortgage interest payment. With this program a home buyer can take 15 to 20% of mortgage payment, up to $2,000, as a tax credit every year for nine years. That is they can take it off their tax amount dollar for dollar. That money can also be counted as income for those years, since you're not paying it to the government. There are some ramifications if you sell your home at a profit within those nine years, you must pay a percentage of the profit as a recapture tax, so buyers need to be informed about that. Freddie Mac (FHLMC) is another program that offers grants for closing costs and some state have their own housing assistance program. Housing authorities in many cities often have first time buyer prgrams, too. The new tax law creates a great opportunity for new home buyers. Now people can withdraw as much as $10,000 from their IRA savings accounts for for the purchase of a first home. All of these programs are available to both men and women but it seems that women are more willing to do the research and get educated about what is available to them. Q. What advice would you give to a woman who wants to buy her home in the next five years? A. The most important is to stabilize your income and employment. Stay in the same line of work for at least two years. If you are thinking of becoming self-employed, wait until after you buy the home. If you have a former husband, make sure that all your credit is separated formally. If you receive alimony or child support, deposit these into the bank separately from other deposits (so there will be a record that you receive them regularly over time). Do not have him pay your mortgage, rent, or other bills directly. Have a separate checking account from the date of separation. Q. Have you helped unrelated partners purchase property? What are the challenges that arise in those kinds of cases? A. If you're talking about residential real estate, the question comes up whether the property will be owner-occupied or not. If one or more partners will not be living on the property, they are called non-occupant co-borrowers. Some lenders will blend their income, debt, and credit with the occupant (which is usually better) but most will not. If it is an income property purchase, there is no problem. All partners income, credit history and credit balances are considered. Q. Any other words of wisdom for women who are potential home buyers?
A. You mean other than that they come to me? This has been a great conversation with: A Woman and Her Money is a regular feature at The Working Moms' Internet Refuge
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