If you are thinking investing your money on real estate property then you should take advantage of the great opportunity that is open in the real estate market now. Even real estate agents would agree that this is an excellent time to purchase a home for first-time home buyers.
Though some economists see good signs that will keep home prices low for the predictable future, other favorable incentives for home buyers may not be available soon. While these favorable incentives for home buyers are still available, it would be a great chance for first-time home buyers to make the most on these home buyer incentives. Now here are the reasons why buy now is an excellent time for first-time home buyers.
First, according to one mortgage giant the average interest rate for a 30-year fixed mortgage hit a record low at 5.12%, this is the lowest point since the end of May. In addition, the mortgage titan says that a five year hybrid adjustable rate mortgage, that covers a five-year fix rate then adjusts, had an average rate of 4.57%, a record low since January 2005.
The credit crisis may have shown the risks that involve short-term ARMs but it makes sense for mortgagors who do not plan to stay in their home for more than five years to consider a five-year hybrid ARM. Young couples may find this a good option if they are likely to move after five years to search for a larger place. But do not expect that these low rates will remain for a long time as the increasing budget deficiency will likely affect these rates and push it higher over the next few years.
Next is the first-time home buyers tax credit. The implementation of the economic stimulus package gives first-time home buyers a tax credit of up to $8,000 when they buy a home before the month of December. The positive side of this tax credit is that it does not demand you to repay. Taxpayers with adjusted gross income that goes over $75,000 and for married couple with an adjusted gross income that goes over $150,000, phases out their credit. The negative aspect is you cannot use the money for down payment because you can only claim the money once you have closed a deal. However, you can turn to state housing finance agencies as they offer bridge loan to qualified home buyers.
The credit can be reimbursed, so even if you owe less than $8,000 on submitting your 2009 tax return, you will get a reimbursement for the balance. The credit becomes a beneficial tax break for middle and low income groups who pay small or no federal income tax. Now, to become eligible for this tax break, you must close a home purchase by December 1.
You will be eligible as a “first-time buyer” if you have not owned a house in the past three years. However, you will not qualify if your husband or wife has owned a house in the past three years. So if you are qualified for this window of opportunity, seize the opportunity open for first-time home buyers because it is fast closing unless lawmakers succeed in extending the tax credit into 2010.
Due to current credit crisis, the process of loan approval has slackened as lenders have tightened lending standards. So the process of completing a home purchase, which normally happens within 45 days after signing a sales contract, will take a bit longer now. The whole process may take at least 60 days. In spite of the slow grind in the real estate market, you should capitalize on this opportunity if you have not owned and house and qualify for the first-time home buyers tax credit. Buy now for first-time home buyers tax credit. As the conditions quickly change in this unstable economy, it would be a wise move to act immediately and benefit from this opportunity to own a home if you have not owned one.
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