Planning to buy a home this spring? One Cleveland-based bank has an extra incentive for you to do business with them when it’s time to take out your mortgage. Third Federal Savings is offering $1,000 to homebuyers who take out a mortgage through the institution.
The catch? Your new home must be in Ohio or Florida. Also, it must be a new purchase (meaning you can’t get the $1,000 for refinancing your current home) and, of course, the mortgage needs to be through Third Federal Savings.
While picking up and moving to Akron, Ohio, for $1,000 probably isn’t a great financial choice for most people, if you’re already scoping out homes in Ohio or Florida, this is a great opportunity to get a little cash back during the costly buying process.
The deal is available for at least a couple of months, according to reports on Cleveland.com. Spring is traditionally a popular time to buy new houses and condos, and the bank hopes to provide an additional incentive for people to buy a home this spring.
Why Is a Bank Giving Money to Homebuyers?
Bank Chairman and CEO Marc Stefanski told Cleveland.com he hoped to reinvigorate the slow housing market by offering the financial incentive for closing on a home.
Before the most recent recession, 95% of the bank’s business was in mortgages but, after the recession, the percentage flip-flopped and only 5% of their business was new mortgages (the other 95% of business was refinancing people’s homes). Third Federal Savings is hoping to turn those numbers around and encourage people to buy new homes.
The idea for the promotion came after bankers noticed a huge upswing in mortgage applications after the federal government started offering home-buying incentives, such as the $8,000 credit for first-time homebuyers offered several years ago.
The Fine Print
Unlike with many other home-buying incentives, the bank doesn’t require you to be a first-time homeowner to take advantage of this offer. Anyone buying a new home in Ohio or Florida is eligible, and it sounds like both house, condo and apartment purchases all qualify.
You do have to live in the home, though. The fine print notes the deal is only available for owner-occupied primary residences. So if you’ve been eyeing a vacation condo in Florida or a rental property, you won’t qualify for the offer.
As for the money, what can you do with it? Anything you’d like. You could buy LEGOs to hone your skills for a LEGO-building job, book a suite on a cruise or even buy hundreds of bottles of glittery toenail polish. After closing on your new home, the money is yours free and clear to spend on whatever you’d like.
However, Stefanksi suspects most people will spend their windfall sprucing up their new homes. Their spending, whether it’s on a new sprinkler system, updated flooring, a new gas range or a rose garden, will further recharge the home-buying and renovating economy.
If you do get a mortgage for an eligible home through Third Federal Savings, you’ll get a $1,000 check in the mail four to six weeks after closing. Part of the reason the company actually mails a check, instead of just deducting the amount from the costs involved, is that it wants the homeowners to feel they’ve received something tangible.
“We want to put cash in our customers’ hands,” Stefanski told Cleveland.com.
That check may be taxable, though, so be sure to ask your tax professional before you spend the full $1,000 — it may be prudent to set some aside for Uncle Sam.
If you’re quick, you could even earn an extra bonus. People whose mortgages are pre-approved by April 17 will receive an additional $100 to spend at Home Depot. You’ll get one $50 gift card when you’re pre-approved, and the other at closing.
What If I Don’t Want to Move to Ohio or Florida?
The Third Federal Savings offer is only good for home purchases in Ohio or Florida, but there are plenty of home-buying assistance programs to help people in other states turn their real estate dreams into reality.
The U.S. Department of Housing and Urban Development (HUD) offers many first-time homebuyer assistance programs. Search their website for a wide variety of programs — though many of these incentives are only available to first-time homebuyers).
State Programs to Assist First-Time Homebuyers
While the government’s $8,000 tax credit for first-time homebuyers has since long expired, many states offer their own incentives to first-time homebuyers to encourage home ownership. If your state isn’t listed below, check HUD’s website for programs that may be available in your state.
Here are just a few of the many programs available:
New York state offers a number of programs for homebuyers, including the Achieving the Dream Program, which provides low-income, first-time homebuyers with low rates and low down payments. Remodel New York provides assistance for financing the home and conducting necessary repairs.
Colorado offers a SmartStep Program for first-time buyers that provides fixed-rate mortgages and low rates as well as down payment and closing cost assistance. They also have other programs to help homebuyers.
North Carolina offers first-time homebuyers very low market rates, down payment assistance and a Mortgage Credit Certificate that can save homebuyers up to $2,000 per year on their federal taxes. The North Carolina Housing Finance Agency has a complete explanation of the state’s programs.
Your Turn: Are you planning to take advantage of this bonus?
Kristen Pope is a freelance writer and editor in Jackson Hole, Wyoming.