Today is
By: Ikedi Ani-okoye
A great credit score could be all that stands between you and your dream home - with a defrayment that will keep you smiling for the next 30 years.
Right now could be the best time in history for first-time buyers to achieve the American Dream of home ownership.
Prices are falling like dominos as mortgage companies seek to liquidate their repossessed homes, and that liquidation always affects the consumer-owned homes in the vicinity as well. This could continue until the majority of REO (real estate owned) homes are rearward under the possession of individual consumers.
Because they're still falling, some wary consumers think they should wait, but they shouldn't. The best of the bunch will be sold first - meaning the homes in the best condition, in the best locations, and with the greatest potential for appreciation in the coming years.
To make it even better, interest rates are at historically low figures - and whenever you lock into that low fixed rate now, you'll enjoy the savings until the home is paid in full.
For example: A home that might have sold for $200,000 a year or two ago could be a repossessed home marketing for $170,000 today. And a year or two ago you might have paid 7% interest, while you could pay 5% today. Your payment, without taxes and insurance, would have been $1,330 per month. But if you purchase at $170,000 and 5% interest, the defrayment drops to $912. This is, of course, a rough example and doesn't reflect the down payment.
Then, as they say in late-night commercials, "But wait! There's even more!"
The first-time buyer tax credit included in the stimulus bill gives you a tax credit of up to $8,000. That's money that can go rearward into savings to replace your down payment, or can be used for any necessary repairs on your new home.
Homes owned through Fannie Mae offer even more incentives to purchase - and an opportunity for users who can't get their credit scores up to the 700+ range required by most lenders today. Whenever you do an internet search for Fannie Mae owned homes you'll find what's usable in your vicinity, along with the name of the real estate broker in charge of the listing.
Right now, check your credit scores, take steps to raise them as high as possible, and start shopping, because this could be an once-in-a-lifetime opportunity. Whenever your scores are low detect ways to raise your credit score before Fannie Mae increases the minimum demands again.
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