Time is a tickin' on the first time home buyer tax credit, so if you're still thinking it's probably time to put those thoughts into action...
I know there are many first time home buyers out there wondering about the first time home buyer tax credit and whether they should go for it or not. Now that we're almost down to the last 60 days, I thought I'd clear up a couple of questions that I know first time home buyers have.
First of all, at least here in the Iowa City area there is still time to find and close on a home before the deadline of November 30, 2009. There will be exceptions, like short sales, where there won't be enough time to close. Generally speaking though the majority of our listings on the MLS are regular resale properties, so in normal circumstances you should have time to find and close on a home before the deadline for the tax credit.
So you have enough time. How about financing? First of all, don't listen to everything they tell you in the media. You won't always need to put 10% - 20% down. With an FHA loan you will need a low 3.5% down and your credit doesn't need to be perfect either - reasonable credit will do. Here in the Iowa City and Coralville area FHA loans are extremely popular and don't take any longer to process than a regular loan. If you're thinking of moving to a rural area like North Liberty, Solon or Tiffin, then a USDA, Rural Development Loan may be perfect for you. Both of these loans assume that you will be living in the home for a longer period of time.
Now what if you're not intending to live in the home for more than 3 - 5 years? Iowa City is a relocation town. A lot of times people relocate to the area for the University of Iowa or the UI Hospitals and it's pretty common for them to stay in the area for around 3 - 5 years. The local banks have some excellent in-house loan options for just this kind of scenario with 100% financing on 5 - 10 year ARM's (Adjustable Rate Mortgages) at extremely good rates. Hills Bank posts their rates online for you to check out here. It goes without saying that although the banks came up with these loans to cover a demand for those relocating to the area, they're also very popular loans with anyone buying a home who may not qualify for an FHA or RD loan. Just as an example, in the current market it's become more difficult to finance new construction condos. That's the kind of scenario where an in-house ARM is the perfect solution.
So how long do you have before you run out of time for the first time home buyer credit? You probably need to be out there looking at homes now. Depending on the lender, you also probably need to have an accepted offer by October 31 to comfortably make the November 30 deadline. Lenders typically need 30 days after getting an accepted offer to process the loan. Larger banks may need more. My clients usually work with the smaller, local banks and they can often speed up the process, depending on the circumstances. My shortest processing time was 18 days from accepted offer to closing and that was a VA loan, so I think that speaks for itself...
So what do you think? Is it time to stop wondering and time to get moving? If you'd like some help figuring out your options, just contact me either by email or @ 319-400-0268.
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