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Is now a good time to buy?

Posted on May 16, 2009 by Ray Williams (NMLS #216267).

I have been asked this question by many friends lately. I keep coming back with the same answer. Not because I am in the business, but because I do believe it is a great time to be a first time buyer.

You have to look at where things are at. Yes, the economy is not in the greatest shape. However, in Denver we have a more diversified workforce which means many people are in safe job positions. If there have been layoffs, they have been limited by the reorganization that has happened within companies, by figuring strategic ways to keep more people employed.

First, the real estate side of things. I am consistently seeing clients whoa re refinancing their homes, find that their value is higher then they expected. It is bucking the trend of what the media is putting out there. As an example, recently we got an appraisal back for a client who lives in Arvada. There is a section in an appraisal on your home that mentions the stability of the neighborhood. Through a few methods, including average time for homes to sell. Another is the valuation as increasing, stable, or declining. His home showed houses selling around his home in less then 90 days. Also, the valuation was showing as increasing in value. So the real estate economy in the majority of Denver is stronger then the media leads on to be.

Second, mortgage rates! These are at all time lows. We are in fact seeing rate in the 4.5-4.75% range consistently right now. What that means to you in buying your first home is that if you bought the same home today , but last summer when rates were closer to 6.5%, your payment would be $200 0r more cheaper for that same home per month. On the other side of that, if you wanted the same mortgage payment, it would allow you to buy a home that is $20-$30K higher in purchase price.

Third, There is a first time buyer tax credit available when you buy a home and close on it before December 1st of this year. This tax credit is up to $8,000 for single or joint filers. Or $4,000 each for those married and filing separately. If you reside in the home the next three years, the tax credit is your to keep. The tax credit is added to your federal tax return. So as an example if you were going to get a $500 federal return, you would get an $8500 return if you qualified for the full amount. The $8000 is derived by 10% of your purchase price. So as long as you buy a place over $80,000 you are eligible for the full amount. There are income limits as well, but click on the link I put in to read the I.R.S FAQs.

So if you wrap all of those together into is now a good time to buy, here is what you have. One of the stronger real estate economies in the nation, comparatively speaking. Low interest rates. A first time buyer tax credit. When you factor all of those into that real estate markets go in cycles, and we are heading towards better days in Denver’s real estate market. So if you can still buy cheap, with low rates, and get $8000 free money to do so, ask yourself the question: Is now a good time to buy?

And if you need down payment assistance, check out CHFA ro CHAC for more information.

Let me know if you have any questions about this blog rwilliams@summit-mortgage.com~ Ray

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