I received an e-mail from someone in the Lakeland area desparate for financing help after the downpayment assistance program she and her husband were approved for ran out of funds. She found my website and my pages directed to first time home buyers. I responded to her e-mail, with other options such as USDA rural home loans and VA, since these are the only loans available now that offer 100% financing. Unfortunately, these do not work for their situation. There are also bond programs at the state level here in Florida that do have money available (for now). Chip Gregory at Trinity Mortgage is giving her a call this morning to see if they may be able to qualify for one of these programs. If so, they may be able to keep their deal together, although the bond interest rate is higher than market rates. I guess my message to first time and even experienced buyers and sellers is that navigating today's real estate market is more challenging.
It is still a terrific opportunity for buyers with so many options available for down payment assistance, lower prices, lower interest rates and of course the vast selection of properties available for sale. There are hurdles that you must get over to take advantage of these opportunities though. First, while downpayment assistance is available at the city, county and state level, many of these programs are experiencing greater demand which means fewer funds available. Be prepared for a plan B if you are looking to use downpayment assistance monies. Bond programs are almost certainly going to have higher interest rates, because the bonds have already been established and rates have been declining. Look at this as an opportunity to take advantage of the great prices and plan to re-finance at a later time if that is available. The clock is ticking if you are planning to take advantage of the first time home buyer tax credit. If you want to qualify for it, you must close by November 30, 2009. You need to get started now to give yourself time to find, negotiate and close the transaction before the deadline. If you put it off, you could miss out on this tax break. Remember, interest rates fluctuate on a daily basis. They can go up or down based on changes in bond markets. If the rate you are quoted sounds good today, you may want to lock it. The Fed is already at 0%, and while this does not directly effect mortgage rates it does have an impact. They can't go any lower to try to move mortgage rates down, and they can only print so much money before inflation starts to come back into the picture. If you believe, as a number of economist do, that an economic recovery could begin in the later half of this year then lock now because rates will go up with the economy. Finally, prices are probably not going to rocket up nor is selection likely to drop like a rock. Here in Orlando prices have continued down, being lead by foreclosures and short sales. Inventory of homes has also decreased, and if the current trend continues we will have a balanced market within the next 12 months or so.
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