Smart Moves to Make in 2009
2008 was not a good year in the housing market. The word "foreclosure" dominated the news, and even many homeowners who were making their payments found themselves underwater on their loans due to falling home values. This year, unfortunately, is not expected to be much better. However, there are a few sunny spots in the 2009 mortgage forecast.Mortgage Modifications and Refinancing
In 2009, more homeowners are expected to refinance or modify their mortgages. In February, President Obama proposed a $75 billion relief plan to help lower borrowers' monthly payments to affordable levels, keep them from foreclosure and restructure mortgages. If the plan works, more people will be able to keep their homes. This could cause prices to stabilize because fewer homes would be sold at steep foreclosure discounts.
$8,000 First-Time Homebuyer Tax Credit
If you're house hunting for the first time, you may get an extra boost this year. The government's new stimulus plan includes an $8,000 tax credit for first-time homebuyers. You may qualify if you meet the following criteria:
- Be a first-time homebuyer, or a "buyer who has not owned a principal residence during the three-year period prior to the purchase."
- Purchase the home between Jan. 1 and Dec. 1, 2009.
- Have a modified adjusted gross income (MAGI) below $95,000 for an individual or $170,000 for a married couple filing jointly.
- Use the home as your "main" home.
- Live in the home for at least three years after the purchase date.
- Pay $80,000 or more for the home. (If the house costs less than that, you can claim a credit for 10% of the purchase price.)
New Homebuyers Jumping Into the Market
With rates as low as they are, and home prices at affordable levels, the mantra is "now is a great time to buy a house." In 2009, many may heed this advice. New homebuyers are expected to enter the market in 2009, but lenders are enforcing stricter qualification guidelines. A qualified buyer will likely need a high credit score and a down payment in order to get a mortgage. At American First we can help you run the numbers and see if buying a home is in your future. We can help you finance an FHA loan with a 3.5% down payment. This loan offers a flexible credit requirement and no income limits, so the qualifications are much easier to meet.
Make Your Move
While 2009 will still be rough, as the government works to stabilize the housing market, there are smart moves you can make. Visit www.amerfirst.org or call 800/ 290-1112 to find out how our mortgage professionals can help.
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