As the loan programs continue to change, many Buyers are excited about the $8000 tax rebate, but do not have sufficent funds for a downpayment. The National Association of Realtors has been working towards a more immediate solution.
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said on Tuesday “FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.” This translates into a non-secured loan for 1 year from the lender to the Buyer (read your lender’s fine print regarding exclusions).
To check your eligibility, visit the WRA’s First Time Homebuyer’s Website. Call me today to discuss your home-buying opportunities in Dane County!
I recently put up a post about whether it was better to rent or buy here in Madison. The Freddie Mac site I had recommended targeted both personal and financial reasons to consider one option over the other. As a follow-up, I want to share a mortgage calculator that compares the financial impact of renting versus buying. I found some interesting information when using the calculator with average Madison costs. Assuming you were renting an average priced 2 bedroom apartment in Madison (data provided by ApartmentRatings.com), you would be spending $825/month. After inputting the monthly expenditure of $825, the current average 30 year fixed interest rate of 6.1%, and a $5000 down payment, the calculator estimates that one would have the following after 30 years.
If you were spending $825/month on a mortgage:
You would own a $396,150.27 house
You would have saved $45,040.86 in income taxes on interest payments of $160,860.21.
If had rented a property for the $845:
Instead your $5000 down payment would have grown into $57,791.26
This calculator, which takes into consideration long term inflation, investment return, and tax rates, shows that Madison home ownership makes great sense. Trulia is reporting that the average sale price for a 2 bedroom property in Madison is only $165,000 with many Madison area properties on the market for much lower. With higher inventories and great negotiating power in Madison, now is the perfect time for buyers to step into the real estate market. If you are considering Madison home ownership and have questions about the market or how to proceed, please feel free to contact me.