Now Is The Time To Buy A Home In The Minneapolis Area
If you have been holding off buying real estate, there are several good motivators that you’ll not likely see again for a very long time, perhaps if ever. The reasons:
1) President Bush signed into law a few weeks ago a first-time homebuyer’s real estate tax-stimulus plan. This plan goes back retroactively to all who have bought since April of 2008, and goes through June of 2009. If you purchase a home during this time period, and qualify under the income guidelines (fairly high actually) you can receive a $7,500 tax credit, not a deduction, but full credit. Example: If you normally pay $2,000 into the IRS for taxes, you will now get $5,500 back as your refund. Another one: If you normally get a return of $3,000, now you would get a return of $10,500. This is huge and very unprecedented! This credit is to be paid back at a rate of $500 per year, interest free, coming off of your taxes, or if you have net proceeds at the sale of the home.
Keep in mind:
Under Normal Guidelines, anybody who has not bought in the past 3 years is considered a first time homebuyer.
2) Right now, some lenders are doing a 1-year, 1% buydown on your loan, if you lock on the loan in August or September. Example: you lock a loan at the very low 6.125% rate, your lender (only certain ones) will buydown the first year interest rate to 5.125%. At a loan of $300K this is a savings of $3,000 in interest in the first year, or $250 per month. That, in tandem with the tax credit, can save you $10,500 in real money in this next year. Again, this is huge!
3) Home prices in the Minneapolis metro area and Edina (I and many other professionals) are at or near bottom. Looking at data, we see an uptick in home sales, prices stabilizing. We’ve had a number of homes going ‘multiple offers’ lately. In particular good ones.
4) Interest rates are historically low.
5) The tax credit, the 1-year/1% buydown, in tandem with really low interest rates, and home prices at or near bottom make this your best opportunity for a long time to come.
Put it this way, you’ll save more money in year one than you ever will have in the past (up to $10,500, which can help offset a loss on your sale), and more money in the long run (tens of thousands of dollars) due to low acquisition prices and low interest rates.
When, in future will it get better?
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