This fall could be a particularly great time for first-time buyers or those who have been out of the market for at least three years to jump in.
Here are the reasons why:
• Property 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 on Jan. 1, 2009, when the loan limit shrinks 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 federal tax credit recently approved 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)