Though declining Orlando, Florida home values may be causing some home owners a bit of angst, first-time Orlando home buyers can and should absolutely use this time to capitalize on what is surely a buyer’s market.
As is often the case, the key to make good in this housing market is – as always – a case of preparation meeting timing. If your finances are in order, and you’ve been waiting for a time to buy, now is absolutely the time to purchase your first home.
I’ve provided a little bit of information here to answer some of the “preparedness” questions I get most from my Orlando mortgage clients.
Are Short Sales and Bank Owned Properties a good choice for first-time home buyers?
You bet. Although, it’s important to grasp the difference between purchasing a short sale or bank owned property vs. buying a home directly from an Orlando home owner.
One of the key things to take note of is that these types of transactions will typically run longer – sometimes a long as three months – to complete. Often, they also require some additional flexibility on the part of you, the Orlando First-time home buyer.
Why do Orlando Short Sales Take Longer to Complete? Aren’t lenders eager to get solid owners into these properties?
Yes, lenders and banks are very eager to get solid mortgage clients into short sale and pre-foreclosure homes. However, they’re often short staffed and run long on these deals merely because of back ups in the red tape department. It’s possible for even the most efficiently run home loan lenders two months or more to approve a short sale.
It is possible to speed up the purchase of an Orlando short sale or bank owned property?
Yes. One way for you to speed up the purchase of a short sale or bank owned property is to ask your Orlando Short Sale expert to present you with home purchase choices that have already been through the short sale approval process. These homes do exist – primarily as a result of losing their first bidder due to time constraints. Simply put – the original offer expired because that buyer didn’t have the time to wait out the short sale approval process. If you can find a pre-approved for sale short sale property that fits your needs – make an offer on it quickly. These deals are ready to go, and may prove more timely in terms of time to contract and close.
I’ve heard banks can be stingy on offering any repair credits or covering buyer closing costs. Is this true?
Unfortunately, yes. In many cases, you’ll most likely be required to take ownership of the home “as is.” A lot of times, these homes require some cosmetic work – which may range from replacing carpet to coming pretty near to some major rehab work.
Lenders have normally been reluctant to provide any funds or credits to buyers for repairs. That said, it is becoming a bit more common for lenders to pitch in and cover some of the buyer’s closing costs in order to get these properties off their books.
A friend told me about a first-time home buyer tax credit. Can I qualify for this?
Yes! So long as you have not owned a home in the last three years, and you sign on the dotted line for your home by November 30, 2009, then you’re in good shape to get this tax credit!
Keep in mind that there are some income restrictions, and you should seek advice from a qualified tax professional.
Generally, to claim this tax credit, your MAGI needs to be:
- Single taxpayer: MAGI of $75,000 or less
- Married taxpayer: MAGI of $150,000 or less
Keep in mind that you may qualify for a partial credit even if your income is above the stated limitations!
Cool. Is it possible to use the first-time home buyer tax credit to help defer down payment and closing costs?
Well, maybe soon. However, for now – the answer is no. The Department of Housing and Urban Development did release some preliminary information about allowing FHA borrowers to use a bridge loan to help cover down payment and closing costs. However, the tax credit loan option announcement proved premature, as HUD had not yet finalized the method by which this is to take place. Stay tuned, as I will try to provide some details on this program should it move forward.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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I can also add something… if property that has been foreclosed on .has gone to auction and the bank has taken it back and now owns it. Mostly the bank will perform repairs to make the property attractive. Once the property has gone through the foreclosure process, most liens attached to the property will automatically be wiped off or the bank will settle with the lien holders.