This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.
Here are the reasons why:
- Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.
- Interest rates are likely to decline as Freddie and Fannie get government help.
- The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
- The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15. Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.
Source: The Washington Post, Elizabeth Razzi (09/07/08)