Ever since I though about moving out from under Mom and Dad's roof, I had the notion to purchase a house instead of rent. Probably all those horror stories from others about bad landlords. Of course, I don't recall the storytellers having intimate information; mostly it was hearsay. That's OK!
Now that I own a few rental homes, I like to think that I am a good landlord and take care of my clients. Of course, I ask that they take care of my house, but it's a two-way street. I can certainly see why some people like to rent and, as a mortgage planner, why others have to rent.
During a discussion the other day about interest rates and home prices, it occurred to me that there really may not be a better time to convert renters to buyers if possible. Here are my top four reasons in no particular order. Tell me what you think...
1. Mortgage rates are at near 35 year lows. Although I do not advocate shopping by rate along, this is really frosting on the cake. Even with good rates, an estimated 60% of potential homebuyers are sidelined due to credit issues. Fortunately, this is something I can help with. Visit my site at www.usccraonline.com and tell me what you think.
2. Home prices are still low. We are still in a buyers market and the buyer has a lot of options, including asking for the seller to pay their closing costs. While FHA will still allow 6% towards closing costs and prepaids, etc., they do require a downpayment of 3.5% currently. This can be either gifted from a family member or gotten from a secured loan or a loan from a family member.
3. The government has just given first time homebuyers an (up to) $8,000 tax credit. For full details, click here. The good news is that if you have not owned a home in greater than three years, you are now a first time homebuyer. Here's an idea.... get a loan for the downpayment, close before November 30, 2009, and then file an amended return or wait to file on your 2009 taxes for the credit and pay back the loan. Disclaimer: I am neither a CPA nor an attorney... consult yours first.
4. This may be one we are not talking about much, but we will. As more and more people unfortunately lose their homes to foreclosure, they will have to live somewhere. Combine the law of supply and demand with mini monopolies, and you will start to see rent increase. While those post foreclosure may have to pay the inflated costs, those that have been renting can now buy those same homes that were given up and get great deals. What about having that first time homebuyer purchase a bank-owned or HUD home and be able to borrow up to $35,000 to fix it up. How far will that and a tax credit check go for someone who has been renting????
As you can see, and please comment on, this is a great time to get the renters off the fence and into a home of their own. If you need some other suggestions, please contact me. If you are a Realtor in Indiana, let's talk about how we can work together to get more people into homes of their own.
Scott Swinford, your Northwest Indiana Loan Guy
Your source for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and much more.
Credit Issues? Not an issue for us! Visit www.usccraonline.com.
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