Attention First-Time Homebuyers – Get Moving!

August 5, 2009

It has recently been reported that home sales, construction and prices increased in June. What does that mean for first-time homebuyers? Now is the time to do your homework, take advantage of savings and offers, and get into a home!

Government Tax Credit

If you purchase your first home before December 1, 2009, you may be eligible for the government’s $8,000 tax credit.

Did you know that if you get funded with an FHA mortgage loan, you can use this money to help pay the down payment costs? However, you will have to come up with the first 3.5% of your down payment. You can go here for more information on the Federal tax credit.

Look for Foreclosures

Unfortunately, now is not the time to buy at the market’s lowest. Sellers are not always budging these days. A good bet is to try to find a foreclosure. Usually, the homes are actually in fairly good condition.  How do you find foreclosures? The easiest way is to go online to sites like this. Or, you can go to HUD, or the U.S. Department of Housing and Urban Development, to find a foreclosure in your area.

Or, you can always find a local Realtor who can help you. They usually have the “hot list” for foreclosures in the area you’re looking in. 

Sometimes it makes sense to buy a foreclosure. You’ll get it for less, and then you can use the extra money, or equity if you have it, to make upgrades, if necessary.

Not sure about the neighborhood? Definitely check it out first. Walk or drive through the area and see how many homes are up for sale and the condition of the homes. Also, is it near a busy intersection?  If you’re bold enough, you can even talk to some of the residents there and ask them their opinion of the neighborhood.

What Can You Afford?

First, get pre-qualified by a lender to see what you can spend. Remember to factor in the downpayment, which can be as much as 20% of the home price. 

It’s a buyer’s market. Some sellers may desperately need to sell their home, so be sure to negotiate and take advantage of the fact that they need to sell their home, fast.  And ask about seller financing. You might be able to get a partial down payment or closing costs covered.

There are several first-time homebuyer programs available. Go to HUD to find out about programs you may qualify for.

Educate yourself before you shop, and you’ll come out the winner.

Questions or comments? E-mail me at blogger@matadorsmoneymatters.com.

Posted in Loans, Tips