Pennsylvania First Time Home Buyer Assistance

On Wednesday, June 16, 2010, the senate approved a plan to give homebuyers an extra 3 months to finish qualifying for federal tax incentives that boosted home sales this spring.  This will give  homebuyers until September 30, 2010 to complete their purchases and qualify for tax credits up to $8,000.  Under the current terms, buyers had until April 30, 2010 to get a signed sales contract and until June 30, 2010 to complete the sale.

The proposal would only allow people who already have signed contracts to finish at the later date.  I will keep you updated on the progress of the proposal.  The bill has to be voted on by the Senate and House, then signed by the President into law.

UPDATE 7/1/2010:  Congress passed an extension of the closing deadline for the HomeBuyer Tax Credit, the Homebuyer assistance and Improvement Act. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010, that have not yet closed. The new closing deadline for eligible transactions is September 30, 2010.

Please consult with your Tax Advisor to see if you qualify.

Mortgage rates for the week of June 3, 2010:

30-Year Fix Rate Mortgage:  4.79  percent

15-Year Fix Rate Mortgage:   4.20  percent

5/1-Year Adjustable Rate Mortgage:   3.94  percent

1-Year Adjustable Rate Mortgage:   3.95  percent

With the first-time homebuyer tax credit deadline having come and gone, you may be asking yourself, “What now?” Fortunately, the door is now open to a new wave of savings: Distressed Properties.

For many buyers, the term foreclosure brings up images of run-down homes with no heat and rotting wood. While this is still the case for some homes, it’s no longer the standard. In fact, first time buyers are snatching up distressed deals in decent condition for great prices. 

According to a November 2009 Keller Williams Research Buying Distressed Properties Survey, 40 percent of all buyers for bank-owned foreclosures (REOs) were first-time buyers in 2009. 50 percent of all short sale buyers were first-time buyers.

By definition, a distressed property is one that was purchased with a loan and the homeowner is no longer able to make their mortgage payment resulting in foreclosure – or if they’re lucky a short sale – meaning they owe more on the home than it’s currently worth. With a 20 percent increase in foreclosures from 2009, distressed properties still remain a large portion of home sales and are going to continue well into 2010 as homeowners continue to feel the effects of an economy on the mend.

If you’re in the market for a home and are prepared for a unique transaction, a distressed property can be a great option. Here’s why:

Prices are low – Buying a foreclosed property is an excellent way to get a home for less. Research shows you can save 10-40 percent over the price of similar properties in a traditional sale.

Mortgage costs are low – With rates hovering near historic lows, financing costs to are favorable. Keep in mind, rates are always changing. It’s important to begin the pre-approval process so that you know how much you can realistically afford.

You have options – The number of homes in some stage of the foreclosure process still remains high. RealtyTrac, a site dedicated to tracking foreclosures across the country, estimates that there are approximately 2.1 million homes in some stage of foreclosure in the United States.

Sellers and lenders are motivated – According to data from RealtyTrac, in April, one in every 387 households in the country has received a foreclosure filing. The bottom line is that many sellers are still feeling the pain of a down economy and are anxious to out get from under a home that is putting stress on their current financial frustrations. While it is still an emotional transaction, these sellers are willing to come down on price or even consider concessions such as helping out on closing costs. Banks holding on to large portfolios of Real Estate Owned (REO) properties want to unload quickly – and price these home to sell.

Your best ally when purchasing a distressed property is an expert. Always have a professional REALTOR® by your side to help you make informative decisions.