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It's The Right Time For The First Time

Feb 25, 2008
It might be the single most common question a Realtor hears - is this a good time to buy a house? While the answer depends on your personal circumstances, there are certainly times and circumstances that make "yes!" the right answer for most people. If you're a first time home buyer, this is one of those times. What's bad news for home sellers has created an excellent market for anyone who is in the market for a home.

But I keep hearing the housing market is falling apart. How can that be a good time to buy?

Different market conditions favor different kinds of buyers. Over the past several years, the housing market in Florida has been perfect for investors - people who were looking to buy low, sell high and get out quick. Property prices skyrocketed, and investors pushed the market higher and higher. Developers looking to cash in on the rising market bought up land and put up new houses to add to the existing supply of housing. Eventually, the market hit its limit - with so many houses on the market and prices so high, something had to give, and it did. Investors and developers who didn't sell soon enough found that their properties wouldn't sell at the high prices they were asking, and housing prices started coming down.

What's bad for 'investors' is good for buyers.

So what you're hearing out there about the housing market falling apart is true - if you're an investor looking to flip houses or make a quick profit. If, however, you're in the market for a home and are intending to live in it for more than a few years, this is your ideal market. Here's why:

- Housing prices have fallen from their incredible highs just a few years ago. If you've been waiting for lower home prices, you've got them now. The biggest question is how much further prices will fall - and with various agencies stepping in to shore up the housing market, the answer is probably not too much further.

- The supply of homes for sale is enormous, and includes a wide variety of home types. No matter what type of home you're looking for right now, you'll find a lot of choices out there. From town houses and condominiums to single family homes in new and older developments, you've got lots of choices to choose from.

- The government has stepped in to encourage people to buy with lower interest rates on mortgages. Right now, mortgage rates are lower than they have been in some time, especially on fixed rate mortgages.

- Sellers are eager to sell. That means that many of them are offering all sorts of concessions to close a deal. You may find sellers willing to assume all closing costs, help with down payments or throw in your first few month's mortgage payments to sweeten the deal and get you to close.

Is it a good time for YOU to buy your first home?

Of course, you need to take your personal circumstances into account when deciding if this is the right time for you to buy your first home. Some of the considerations that should weigh into your decision include:

- Your family circumstances - many couples decide to buy because they're ready to start a family, for instance. Is it emotionally time for you to buy a home?

- Your financial circumstances are important, too. Is your income stable? Can you afford a monthly mortgage payment, insurance and taxes?

- Are you planning to stay put for more than five years? Conventional real estate wisdom is that housing prices rise over the course of time. In most cases, a family that stays in their home for five (some say seven) years will see their home's value increase.

Assistance for First Time Home Buyers

If everything else is in place for you to buy your first home, but the closing costs and down payment are holding you back, there are a number of programs on the state, federal and county level that are designed to help first time home buyers get into that first home. Depending on the program, you may be eligible for down payment assistance, low interest loans, foreclosure protection, education and assistance with closing costs. Most are aimed at low-income families, but the definition of low-income varies from program to program.

Do you qualify for first time home buyer's assistance? The qualifications vary slightly from program to program, but the list below (from Floridahousing.org) is typical. You qualify for the first time homebuyer program if you:

- have never owned a home,
- don't claim their mobile home as real property,
- haven't owned and occupied a home as their primary residence within the past three years,
- have established credit worthiness, and
- have an annual income that does not exceed program limits.

Programs that Offer First Time Homebuyer Assistance

The most well known first time home buyer assistance programs are managed by two federal agencies, Fannie Mae and Freddie Mac. Each of them sponsor housing assistance programs for different purposes.

Fannie Mae's MyCommunity Mortgages

MyCommunity mortgages are available to help buy or refinance single family homes, condominiums and two-to-four family homes that you will live in as your primary residence. The program is designed for people who may have little to or no savings available for a down payment, and don't have a traditional credit history to show that they handle credit responsibly. Credit can be established through a history of paying rent and utilities or any other payments that you make on a regular basis. The program will also consider "non-traditional" income such as income from boarders or government benefits.

Freddie Mac's Home Possible Mortgages

Freddie Mac underwrites loans for low and moderate income home buyers, including first time home buyers. The programs sponsored by Freddie Mac help first time homebuyers overcome some of the most common barriers to home ownership, including impaired credit, no down payment or lack of savings for closing costs. Freddie Mac's Home Possible initiative offers a number of different mortgages through many lenders in Florida designed for special circumstances. They include 100% loans, low interest fixed rate loans, down payment assistance and home buyer education.

Florida First Time Home Buyer Programs

In Florida and locally, the City of Tampa, and Hillsborough and Pasco County each offer home buyer assistance programs sponsored by HUD. Each program can offer assistance with down payments and closing costs, homeowner education and low interest fixed rate mortgages for qualified home buyers. The income qualifications are spread over very low, low, medium and moderate income families, with levels of assistance dependent on where on the income scale you fall.

If you've been putting off buying your first home because you were waiting for the time to be right, the time is right now.
About the Author
Calum MacKenzie is REALTOR focusing on Tampa real estate, New Tampa real estate and Wesley Chapel real estate.
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