Perhaps for first-time home buyers investing their money on real estate property in times like this is a very risky move. But wait! Do you know that this is a perfect time to buy now for first-time home buyers? There is a great opportunity that is open in the real estate market now. Even real estate agents would suggest that this is the right time to buy a home for first-time home buyers.

Though some economists are optimistic that home prices will stay low for the predictable future, other buyer friendly incentives may not stay longer. While these home buyer incentives are still around, it would be a great chance for first-time home buyers to take advantage of these home buyer incentives. See the two reasons why buy now is the right time for first-time home buyers.

First, according to the stats released by one mortgage giant, the average interest rate for a 30-year fixed mortgage hit a record low at 5.12%, the lowest level since the end of May. In addition, the mortgage titan say that a 5/1 hybrid adjustable rate mortgage, that covers a five-year fix rate then adjusts, had an average rate of 4.57%, making it a record low since January 2005. The credit crisis may have unveiled the risks that involve short-term ARMs but for borrowers who do not plan to stay in their home for more than five years consider this a good option. Young couples would take a five-year hybrid ARM as a good choice if they are likely to transfer after five years to search for a bigger place. But these low rates are not going to stay longer as the increasing budget deficits will likely catapult these rates and push it higher in the next few years.

The second reason why buy now is the first-time home buyers tax credit. The implementation of the economic stimulus package gives first-time home buyers a tax credit of up to $8,000 when they buy a home before the month of December. The good thing about this tax credit is that you are not required to repay. Taxpayers with adjusted gross income that is larger than $75,000, and for married couple with an adjusted gross income that is larger than $150,000, have their credit terminated. On the flip side, you cannot claim the money and use unless you have closed a deal. Nevertheless, in case you need money for down payment, there are state housing finance agencies that you can run to as they offer bridge loan to qualified home buyers.

The credit is refundable, so even if you owe less than $8,000 upon submitting your 2009 tax return, you are going to get a refund for the balance. This makes the credit an important tax break for middle and low income groups who pay little or no federal income tax at all. For you to qualify for this tax break, you must complete a home purchase before December 1. You will be considered as a “first-time buyer” if you have not owned a house in the past 36 months. However, you will be disqualified if your spouse has owned a house in the past 36 months. So if you are in the position that makes you eligible for this window of opportunity, do not let it slip your hand as these great incentives for first-time home buyers is not going to stay longer unless lawmakers succeed in prolonging the tax credit into 2010.

Because of the credit crisis, loan approval has slowed down as lenders have enforced stringent lending standards. So the whole process may take longer than usual to complete a deal. In the past, completing a home purchase is possible within 45 days after signing a contract. But these days, the completing a home purchase may take at least 60 days. Despite the slow grind in the real estate market, this is a great opportunity that first-time home buyers should capitalize. If you have not owned a house and qualify to buy now first-time home buyers tax credit, this is your chance. This may be the chance you will sorely miss if you do not act immediately because the window of opportunity is not going to stay any longer as the situation quickly change in this unstable economy.

By: Alvin Clavines
Condos for sale in Westchester

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