Reno and Sparks First-Time Buyers - Six Reasons To Buy Now
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If you are a first-time buyer in the Northern Nevada area, read on to discover why this may be the best opportunity in decades to buy a home of your own. 1. Affordability. How often in life do you get a second chance at a great opportunity? Many of our first-time buyers feared that they had been forever priced out of the home market in Reno/Sparks as they watched home prices run up over the past few years. Great news! All of that run up and more has vaporized in the current market meltdown. At current median pricing levels, home prices in Northern Nevada have sunk to approximately their level of December of 2002! In fact, prices have now fallen below their historical median trend line (see graph). In many cases, home prices have even fallen below what it would cost to build the same home. It doesn’t get much better than this! 2. Reduction in Monthly Expenses. How often have you heard the cliché "everyone is buying a home; some for themselves, others for their landlords”? Well, not only is this true, but at current interest rate levels, your monthly mortgage payment may actually be less than the rent you are paying. We recently helped some young newlyweds buy the home of their dreams; they were delighted to discover that they would be paying less in principle and interest than the rent on their former small rental home. The icing on the cake is that rent is not tax-deductible, whereas mortgage interest may be. 3. First-Time Buyer Tax Credit. Until the middle of this year, first-time buyers (defined as those who have not owned a home in the previous three years) can claim a tax credit of up to $8000 if they purchase a home. That’s a tax credit, deducted directly off of the taxes you owe, not a tax deduction, subtracted from your taxable income before your taxes are calculated. (Explore FAQs here.) And it gets better: you can take advantage of the tax credit even if your parents are co-signing on your loan, provided you will be using the home as your personal residence. But don’t wait; this benefit is scheduled to expire on June 30, 2010. Give us a call to explore how this windfall can be used to get you into a home now! 4. Beat the Coming Inflation. Well no, we don’t have a crystal ball, but we do know this: interest rates are at a historical low. For many years, home buyers were faced with interest rates in the 6 – 9% range. When we bought our first home in 1982, interest rates were over 15%! In the past, when interest rates have been as low as they are today, and the government has been in stimulatory mode, inflation followed down the road. This would likely cause an increase in interest rates in order to slow the economy and prevent inflation from getting out of control. Do the math: each full point increase in interest rate causes a significant rise in monthly payments, not to mention the huge amount of additional interest you will have to pay over the life of the loan. Lock in these low interest rates before they begin to creep back to historical norms. 5. 3.5% Down FHA Loans. Afraid you might not have a large enough down payment to get into a home right now? Call us or your mortgage professional to explore the possibility of an FHA insured loan with a down payment as low as 3.5%! Further, you may be able to roll the cost of necessary repairs into your new home loan. Explore the possibilities further at this HUD site, then give us a call to discuss your options. 6. Extensive Inventory. The recent mortgage crisis has resulted in hundreds of affordable homes coming to the market. Many of these are bank-owned properties; others are so-called short sales (learn more about short sales here). Some of these are screamin’ deals, while others are potential money pits. Let us help you navigate through this rough and tumble market to find the diamond property among the cubic zirconia. |
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