First Time Homebuyers Back in Action...

May 12th, 2009 2:48 PM

Getting off the sidelines

Without a doubt, the recessionary conditions, including the overwhelming banking crisis, have scared the wits out of consumers.  Even seasoned homebuyers have resisted any kind of mortgage purchase, joining the ranks of nervous Americans who are sitting on their hands-and their cash-until the smoke clears from the crisis.

The housing market has suffered from this skittish mess.  Inventories have piled up not only in traditional hot spots such as Florida and the East and West coasts, but in neighborhoods all across America.  The Subprime-mortgage">subprime mortgage fiasco got the ball rolling, and a weak economy has led to a rash of foreclosures throughout the country. 

Mired in a dangerous cycle of fear and uncertainty, industries tied to the housing market have experienced dramatic sales slumps, prompting massive layoffs.  As more people lose jobs, they're hardly likely to participate in the traditional real estate market, except in extreme cases, like foreclosure.  Even people who could afford to move have been adopting a wait-and-see attitude.

Tax credit part of the solution

The deals have simply become too good for many people to put off a mortgage purchase any longer.  Home values have dropped 25 to 50 percent, and even more in some locations.  Mortgage rates are at historic lows, dipping below 5 percent.  Home inventories are at all-time highs, with nervous homeowners ready to make buyer-friendly deals.

Added to the mix is an enhanced tax credit for first-time homebuyers, up to $8,000 for those who qualify.  This is applicable only for residences purchased in 2009 between January 1 and December 1.  Unlike the previous 2008 tax credit, this one doesn't need to be repaid.  It's yet another incentive from the Obama Administration to help pump up the slumping housing market.  Combined with the recently passed stimulus package, it could be another shot in the arm for the overall economy.

Like the perfect storm of economic calamity that caused the real estate market to collapse, these latest trends could open the floodgates for new sales.  With low prices and low mortgage rates, and the homebuyer tax credit, the real estate market is starting to see new life.  If the Obama Administration can further stabilize the banking sector, we could see "Sold" signs outside homes once again.

For more information, please call our Assist-2-Sell Office at (314) 993-6023.

 

 

First-Time Homebuyers Reaping Rewards from Economic Crisis...

May 21st, 2009 10:10 AM

As rampant inflation gradually gets squeezed out of home prices, many first-time homebuyers are finally able to afford a house. Lower rates on purchase mortgages-including popular FHA mortgage products-also make it easier for new homebuyers to take the ownership plunge.

Since the real estate bubble burst, prices for homes across the U.S. have fallen 30 percent or more from their dizzying heights.  Homes that traded in the $250,000 range-which was the median price of a typical American residence just two to three years ago-are now more apt to fetch $175,000 or less. The more modest pricing, coupled with an $8,000 first-time homebuyer tax incentive-courtesy of the Obama administration-is luring new homebuyers into the marketplace. They're also being helped by exceptionally low interest rates on loans that include many low-cost FHA mortgages.

First-time homebuyer perks

These new homebuyers are primarily flocking to homes priced well below $300,000, including many foreclosure listings. Lenders are ready to work with them, and government assistance programs and incentives to aid the ailing housing sector are being offered by agencies like HUD and its FHA subsidiary. Buy a home with an FHA mortgage, and it's possible, for instance, to pay as little as 3.5 percent down and get up to $5,000 in cash to help with needed improvements and repairs.  As a result, many new homebuyers are purchasing deeply discounted properties, getting enough extra money to fix those homes up right away with no out-of-pocket expenses, and are earning a big tax benefit in the process.

The $8,000 first-time homebuyer tax deduction is based on a rather broad definition of what a "first-time" homebuyer actually means. According to the IRS, anyone who has not bought a home within the past three years is considered a first-time homebuyer.  That includes many Americans who view the tax perk as a huge windfall.

Purchase mortgage perks

With those kinds of benefits, it's easy to understand why first-time homebuyers are seeing the upside of the real estate downturn and a silver lining in the economic turmoil. Banks are also offering home purchase mortgage loans at interest rates that are historically low. Safe and secure fixed-rate mortgage loans are now available at less than 5 percent interest, which is the cheapest that those kinds of loans have been in about 40 years. Lots of first-time homebuyers have the good credit necessary to get loan approval because they didn't get swept up in the borrowing frenzy that fueled the current economic fallout.

Many have been renting apartments or leasing homes for many years, because buying was too expensive.  Now, however, they recognize their opportunity to become homeowners themselves. Unlike those who already own properties, these unencumbered renters don't have to worry about existing home equity loans, purchase mortgages, or the burden of having to first sell a property in order to consider buying another one.

All this information and much more will be explained at our FREE Homebuyers Seminar on June 4, 2009 at 7:00pm.  Tax Credit Information, Home Inspection Information, "Do you qualify"?  FREE Drawings..... Registration Required so please call now at 314-993-6023!!

 

Important Steps for First-time Homebuyers ..........

May 21st, 2009 10:02 AM

It's a great time to be a first-time homebuyer.  Interest rates are low, inventory is booming, and there are government incentives to help you buy.  If "purchase home" is at the top of your priority list, this is the time to do it.

Timing is everything when it comes to a buying a new home.  The right mortgage, location, and property-all these pieces need to fit together for the purchase to be successful.  Here are some important steps to follow as you begin your quest.  They apply to everyone, from the veteran property owner to the first-time homebuyer.

Financial housecleaning

If there's any lesson to be learned from the recent months of financial crisis, it's that over-extending yourself can have disastrous results.  Before you make a call to a realtor, or even look at the housing section in your Sunday paper, get a good idea of exactly what you can afford.  Analyze your monthly budget. Calculate what you'll have left over for a mortgage payment after buying groceries, saving for retirement, and handling daily expenses.  Give yourself a generous cushion; your mortgage payment shouldn't exceed 30 percent of your gross income.

Check your credit and get pre-qualified

You've determined what you can afford to spend on a new home, but will a lender agree?  It's a smart move to get yourself pre-qualified for a mortgage before you go house hunting.  Obtain a copy of your credit report to make sure that there aren't any errors, which can lower your score.  Then, get quotes from several lenders to see who has the best mortgage package.

Prioritize your needs

It's easy to visit a new home and fall head-over-heels in love with it.  The key to making a smart buy is to avoid that kind of emotional infatuation.  You can avoid it by getting pre-qualified for a specific purchase home mortgage amount, and then listing your priorities for a new home.  If you're looking at a place that has a spectacular fireplace, but you've listed "screened porch" as a must, the reminder could help you avoid making a knee-jerk decision.  Remember your priorities.

Cost checks

Even though there may be a lot of inventory on the market, your priorities list should shorten your shopping time.  Try not to make this a long, drawn out process.  These low rates and ample inventory won't be around forever.  

When you've found the right home, factor in all the costs that will be included in your monthly housing expenses.  Don't forget homeowners insurance, the mortgage payment, home maintenance, and utilities.  

The market has never been better for a first-time homebuyer.  With extra inventory from sea to shining sea, and purchase home mortgage rates at record low levels, it's the ideal time to scoop up a new home.  Even though it's a buyer's market, you need to follow fundamental rules that apply to every first-time homebuyer.  Be opportunistic, but also be smart in the process.

Register for our FREE First-Time Homebuyers Seminar on June 4, 2009 at 7:00pm!!!  Please Call 314-993-6023.  Registration is Required.  Lots of information, Free Drawings........ Call Today!

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