$8,000 First-time Home Buyer Credit

There’s never been a better opportunity for first-time home buyers to purchase a home than now. The good news is that once you buy your home, an $8,000 tax credit will be refunded to you, even if you did not have to pay that much in taxes. This one benefit alone can reimburse the cost or your entire down payment for a home purchase!  More information on the first-time home buyer’s tax credit can be found here.

Affordable prices

The current market correction has brought housing prices down to a more affordable range than they have been in years.

Great interest rates

Since the economy is in the doldrums, the Federal Reserve has lowered short term interest rates in an effort to stimulate economic growth. Meanwhile, government insured 30-year fixed rate mortgages are at 30 year lows.

These fixed rate loans are readily available to borrowers with low down and often no down payment.  Borrowers need good credit and a steady job history to qualify, so if you haven’t already done so, pay a visit to your local lender to get pre-approved.

It is important to consider not only price, but also financing when purchasing a house.  The current market is providing an opportunity to take advantage of low home prices and low interest rates together, which often makes your monthly payment similar to what you would normally spend on rent anyway.

Stability of owning your home

With ownership you will enjoy many benefits.  Some of which are:  Deducting the loan interest expense on your taxes; having stability in your housing situation so you don’t have to worry about having to move if the owner sells the house, or being able to customize your home and yard.

Build Equity / Build Wealth

A high percentage of new business startups are financed through home equity loans. If you would like to start your own business in the future, owning your home--that appreciates in value over time--can make that possible. 

Predicting Bottom Is Too Difficult – Now IS a ‘Buyer’s Market’

Many people are concerned that home prices could fall more and they don’t want to pay too much.  Prices could continue to fall; none of us have a crystal ball.  Even the best economists in the country seem to be wrong more often than they are right.

Timing any market seems impossible to do, however we can see historical trends and we can benefit by having an awareness of those long term trends.  We are clearly in a “down market” or “buyer’s market” right now.  Trying to guess if it will become an even better buyer’s market or if we will head right into recovery is too difficult for even the experts to predict.

Downside of Waiting for Recovery – Higher Interest Rates

With the enormous amount of government spending that will be taking place due to the new stimulus bill, consumers will gain some hope and spend a little more money.  This stimulus may cause the Federal Reserve to be concerned enough about inflation that they will increase the interest rate.  With the discount rate being at one half percent, it can only go down as low a zero, so the odds of it going up are a near certainty.  It is just a matter of when.  Signs of economic recovery will send interest rates higher.  If prices do come down in the next year but interest rates rise at the same time, which is highly probable, the net result will be an equal or higher payment even with the lower purchase price. 

Read up on Financing