If you or someone you know is looking to take advantage of this collision of benefits, please contact us as soon as you can.
Here they are:
1) Homebuyers Grant
2) Low Interest Rates
3) Low Home Prices
4) FHA Financing Changes
1) Home Buyers Grant
Buyer Benefits $8,000 for first time buyers - does not have to be repaid. See link for more details.
$6,500 for buyers who purchase a new residence even though they already own a home - does not have to be repaid. See link for more details.
Seller Benefits First time and move up buyers coming back into the market creates demand for homes which benefits sellers.
Window Closes - April 30, 2010 (homes need to be under contract by April 30, 2010 and closing before June 30, 2010 - Click here for details). Usually, it takes three months or longer to sell a home. That's why it is critical sellers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30th deadline.
2) Low Interest Rates
Your home purchase price is a one time event. Mortgage payments are a monthly event and will be around for a long time. You reap these benefits for years.
Buyer Benefits Interest rates for 30 year fixed mortgages are still hovering around the 5% range. Some loan programs can take those rates significatly lower. These rates are at historic lows and are not likely to go lower.
Seller Benefits Low interest rates bring buyers back into the market creating demand for homes. Sellers become buyers and take advantage of the same low rates.
Window Closes - Sometime Late 2010. There is no question that as we work our way out of the Great Recession rates will trend higher. Timing on this one is my best guesstimate. It could wiggle around a little depending on how the economy is fairing. Remember these rates are artificially low right now because of the Obama Housing Recovery initiative. We'll hear lots of chatter on the news as the rate increase process gains momentum.
3) Low Home Prices
Buyer Benefits Home prices seemed to have bottomed out. Deep discounting is rarely seen these days as homes coming on the market already reflect adjusted prices. We are seeing prices as low as 2002 levels in some areas. This is probably as close as anyone can get to perfectly timing the bottom of the price cycle.
Seller Benefits Buyers coming back into the market taking advantage of lower prices creates demand for homes. Your home may sell for much less than its value a few years ago, but the one you are buying will have dropped as much if not more.
Window Closes - Sometime 2011 or 2012. Prices will again begin to creep up once excess inventory disappears. We don't expect to see rapid price rises at that time but there will be a definite upswing at some point. Conservative lending practices and higher interest rates will keep any rapid rise in check.
4) FHA Financing Changes
Buyer Benefits We just received news about changes to FHA financing that will benefit buyers purchasing foreclosed Banks Owned or HUD properties (click here) which takes effect February 1, 2010. There are other changes looming which will not help buyers using this type of financing. The increasing of FHA insurance premiums and along with increased credit requirements will impact buyers (click here). Seller assistance (now at 6%) will be reduced to 3%. FHA loans are underperforming in most markets so expect to see more negative adjustments to this program.
Seller Benefits Buyer using FHA financing creates demand for home sales, which in turn helps sellers.
Window Closes - Spring 2010. We are waiting to hear when these changes will take effect but understand it will be soon - probably spring of this year.
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