PARAMOUNT MORTGAGE - LENDER'S BLOG

There has never been a better time to buy!

Lately, consumers have been receiving an over-whelming amount of information from the media, ranging from tax credits and credit crunches, to economic woes and stimulus packages. All this information can be very confusing, especially to those individuals and/or families who are asking, “Is it time to buy my first home?” Unequivocally, this is the best time – ever- for qualifying first-time homebuyers to take advantage of what is happening in the housing and finance markets. There is a unique window open right now for first-time homebuyers that needs to be taken advantage of before it closes; and, it will close at some point on or before December 1 of this year. Allow me to explain further.

There are three market conditions present in our St. Louis area that make now, better than ever, the best time to purchase a home. First, there is a large variety of homes in inventory, with great values to choose from, ranging from new and existing homes to those homes that may be in foreclosure. To help you find the right home for you and/or your family, be sure to contact your local REALTOR, who can expertly guide you through the home buying process.

The next reason is the federal tax credit. First time homebuyers (which also include anyone that has not owned a home in the past three years) qualify for up to an $8,000 true tax credit. This means that whatever your refund is – add up to $8,000. It is that simple. Please check with a tax advisor since income and sales price is a factor; but the reality of this is that the government is going to give you up to $8,000. Homes purchased between January 1 and December 1 of this year is eligible. Unlike last year’s $7,500 tax credit, this does not have to repaid over 15- years.

However, the icing on the cake- besides the great selection, good values and free government money (no repayment required) - is the historic low interest rates! Mortgage bankers and financial institutions do have money to lend at great rates. With that in mind, what are lenders looking at to qualify home loan applicants?

Lenders are looking at the same criteria they always have. Stable, verifiable income is checked and established. Credit history is examined. The collateral of the home is assessed through a thorough property appraisal. Customers are also required to have at least 3.5% of the sales price of the home as a down payment. Veterans can still obtain 100% financing through a Veterans Administration (VA) home loan. The debt to income ratio (how much of the gross monthly income is going out to pay bills) is closely examined to ensure customers are not overextended.

These conditions existing at one time are unprecedented. There has never been a better time to buy. The window is open now, so take advantage. Ensure your personal success by working with professionals you can trust. Members of the St. Louis Association of REALTORS and the Mortgage Bankers Association of St. Louis have long track records of working successfully and ethically with the community members.

Information provided by Ruth E. Battle, Past President, Mortgage Bankers Association of St. Louis, Past Affiliate Chairman and Affiliate member of the St. Louis Association of REALTORS.