Georgia First-time home buyers - Buying a home or condo in Atlanta GA
As a potential first time home buyer, I'm sure you've heard that in order to qualify for the $8000 tax credit, you need to be 'under contract' on a home by April 30, 2010 and close (or purchase) the home by June 30, 2010.
That still gives you a lot of time, right?
Not exactly.
There are a few important changes coming in the next few weeks that could impact your ability to qualify or afford a new home.
1) RISING INTEREST RATES at the end of March
Mortgage rates are near historic lows, BUT the Federal Reserve Board's mortgage backed securities purchase program is set to expire. Once the Feds stop the purchases entirely at the end of March, rates are expected to rise quite a bit.
>>> So how would that impact YOU?!?! If you want to purchase a home for $250,000, your mortgage payment would be $1295 (at the current 5.0% interest rate). If the rate goes up to 6.0%, your monthly payment could increase by MORE THAN 10% (by $151.50 per month).
2) Changes to FHA Financing
Most of first-time buyers use FHA financing and as of April 5, 2010, there are some big changes that could impact your ability to purchase a home. Minimum credit scores are increasing, the mortgage insurance premium will increase 0.5% and buyers will only be able to build 3% of the closing costs into their mortgage (previously it was 6%).
>>> How will this impact YOUR WALLET? If you do qualify for financing under the new guidelines, you will spend about $1,200 more in the FHA upfront mortgage premium and if you need the seller to pay the closing costs, they will only able to give you about 70 to 80% of the closing costs -- you will need to come up with the remaining amount. On a $250,000 home, your closing costs are typically 3.5% to 5.5% of the amount you're financing. If the seller can only contribute 3%, you would have to contribute an additional $2500 to $4000 (in addition to your 3.5% downpayment). That's BIG!
3) More competition
As we get closer to the April 30th deadline to qualify for the $8000 tax credit, all the buyers start coming out of the woodwork. Many homes have multiple offers and you really have to COMPETE -- and possibly pay a little more -- to get your dream home!
I hope I haven't made anyone panic and fall off their chair! As a real estate agent, my job is not to scare you or pressure you, it is my job to KEEP YOU INFORMED and look out for your best interests.
If you have questions about the home buying process or need a little advice, I'm just a phone call away.
Happy House Hunting!
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Thank you for visiting our Atlanta Real Estate Blog
Posted by: Kerry Lucasse - Atlanta GA Real Estate Agent - Atlanta Home Search Team
The ATL Home Search Team is part of Keller Williams Realty,
specializing in Intown Atlanta Real Estate, Foreclosures and Bungalows & Historic Homes
CALL ANYTIME AT 404.432.1844
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ADDITIONAL ADVICE / RESOURCES FOR FIRST-TIME HOME BUYERS
First Time Buyers - What Expenses to Expect When Buying a Home or Condo in Atlanta
Key Questions to Ask BEFORE You Buy Your First Condo or Loft
Confused By the First-Time Homebuyer Tax Credt? Get the Full Scoop
Intown Atlanta Neighborhoods - PERFECT PICKS for First Time Home Buyers
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