Safety net for first-time homebuyers

April 1, 2009 12:00:00 AM PDT
If you have been thinking about buying your first home, there is a new incentive starting on Thursday. The California Association of Realtors is making available the kind of peace of mind car dealers are offering. It is really a safety net for anyone who is worried about losing their mortgage because they lose their job.

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The program is only offered to those who use California Association of Realtors, but the end result could be the break many homebuyers have needed.

"There's a new program that's out. It's something that's for free," says Cathy Warshawsky, president of Bay Area Loan.

Warshawsky called clients all day talking about the newest program offered by the California Association of Realtors. Starting Thursday, April 2, 2009, first-time California homebuyers who are suddenly laid off can receive up to $1,500 a month for six months to help make their mortgage payments.

"If they're on the fence or concerned about whether they'll continue to be employed, I would think this would give them a little bit of a push in that direction to go out there and purchase a home," says Warshawsky.

It's similar to programs Ford and General Motors started on Tuesday. If a customer buys a car and is laid off, the companies will cover the payments for a few months.

Golden Gate University consumer psychologist Kit Yarrow, Ph.D. thinks all of these incentives will help consumer confidence.

"Fear is the great impediment when it comes to making large purchases and if they can remove some of the fear and create greater sense of security around buying, I think there's a better chance that people will jump into the market," says Yarrow.

"I would jump on it right away," says Jennifer Carver, a potential homebuyer.

Carver has been looking for this kind of safety net before taking the leap into home ownership. She has rented in San Jose for seven years because she says her job with the school district is so unstable.

"I think it would be excellent because right now, it's holding us back because we're worried about what if something happens, like losing a job or what would we do?" says Carver.

The program starts Thursday and lasts until the end of the year. Roughly 3,000 families will likely benefit from this program.

California Association of Realtors:

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