Chicago First Time Home Buyer: No Better Time To Buy A Home

Jan. 1, 2010 - PRLog -- I was talking with a Realtor@ friend of mine the other day and he asked me about a recent blog post of mine about the regarding the real estate market and the Chicago first time home buyer. In the post I have stated I thought right now was a "Perfect Storm" for buyers. Lets take a look at some of the reasons why I feel this way.

1. Interest Rates Are Low

Let's face it rates have been low for a while now. We have hovered at or near 5% having dipped below 5% a couple of times. For the Chicago first time home buyer that is waiting for rates to move even lower waiting could be disastrous. There have been a couple of times in the past couple of years where interest rates have made dramatic jumps in one day. Having witnessed these drastic rate jumps I know several people who were literally priced out of the market due to the now higher payments. The government has been buying mortgage backed securities in an effort to keep interest rates artificially low. This mortgage backed security purchase program is set to end early next year. Without the government intervention no one really knows where interest rates will head.

2. First Time Home Buyer Tax Credit

The government is giving the Chicago first time home buyer and all first time home buyers up to an $8000 tax credit. A first time home buyer is someone who has not owned a home in the past three years. The $8000 tax credit is only good through 4/30/2010. This means you must have a signed contract in place by 4/30/2010 and you must close on the purchase of your new home by 6/30/2010. While April 30th may seem far away time will fly by and the next thing you know you will be out of time. Buyers should not wait too long because the chances of the government extending the first time home buyer credit are pretty slim.

3. Home Prices Are Low and Deals Are Being Made

Lets face it home prices are low now but eventually they have to start rising. Sellers are offering incredible deals to Chicago first time home buyers. When you factor in foreclosures and bank owned properties there a lot of homes out there priced right. Some sellers are paying as much as 5% towards the buyers closing costs. In many cases the Chicago first time home buyer not only has their closing costs paid but can also have their interest rate bought down. Buying down the rate means the seller is paying for thebuyer to get a lower rate.

4. Changes Are Coming

2009 saw many changes in lending guidelines and 2010 promises to have even more changes. Some of the changes being talked about are raising the minimum down payment for Chicago first time home buyers from 3.5% to 5%, raising the upfront mortgage insurance premium and decreasing the seller maximum seller contribution towards closing costs from 6% to 3%.

All of these factors add up to the perfect storm for the Chicago first time home buyer. Interest rates have recently started to climb and no one knows what the New Year will bring. If you have questions or are in the market to buy your first home please contact me at www.chicagolandmortgagesolutions.com or you can call me at 815-899-3848.