Now May Be the Perfect Time to Buy

Fairfax, Virginia: There’s no place like home for creating memories. And no place like home for the holidays. While it may sound a bit crazy to add this to your shopping list…this holiday season could be the very best time in history to give yourself the gift of a new home.

While there are a number of advantages to purchasing a home Fairfax or Vienna Virginia there is a confluence of factors that make this year’s season a bit more special than past years.

Rates at Historic Lows
Interest rates have been dancing around the all-time-low mark for some time. But did you know that rates hit the lowest ever in October?  This season, FHA, VA and conventional interest rates in Fairfax and Vienna, Virginia are about 0.5 percent lower over this time last year – which translates to a payment savings of approximately $60 per month on a $200,000 mortgage for qualified borrowers.

Today’s lower rates give you an increase in buying power. Rates have already begun to move higher since November 4th, following the announcement of Quantitative Easing 2 by Fed Chairman, Ben Bernanke. As rates increase, your buying power will diminish.

Home Prices at All-Time-Lows In Fairfax and Vienna Virginia
Once school begins, the real estate market tends to slow down and by the holidays, it is at a snail’s pace. The lack of buyer demand is reflected in home prices as sellers become anxious. Homes are more affordable now than at any other point in time since 1970 according to the National Association of Realtors’ housing affordability index. And as the holidays approach sellers may reduce prices further or offer additional incentives.

Lawrence Yun, chief economist for the National Association of Realtors, said home sales still remain subpar. He explained, “The housing market is trying to recover on its own power without the home buyer tax credit. Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty.”

Sellers In Fairfax and Vienna Virginia Are Motivated
With the current economic slowdown many sellers are willing to negotiate – not just on price, but also may be more open to entertain requests for other concessions such as appliances, or paying closing costs. In addition, they may be eager to get the home sold prior to the holidays to avoid scheduling their holiday plans around viewings by prospective buyers. This may give you extra bargaining power.

Once home prices stabilize and begin to improve, these same sellers will be less willing to bargain. As Warren Buffet has said, “Be fearful when others are greedy and greedy when others are fearful.” Once the market begins to improve, sellers may become greedy as buyers panic to secure home purchases as prices start to climb.

Plenty to Choose From In Fairfax and Vienna Virginia
While real estate is local, most markets remain saturated with inventory. Being in the buyers’ shoes right now is akin to being a kid at Christmas – all the choices make it a bit overwhelming.

If you’re serious about buying a home, the first step is to define what you are looking for in a home and at what price…and then get qualified! Once you find a house you love, be willing to negotiate a fair deal and grab it. Waiting around for things to improve from here could cause you to lose the opportunity on that “perfect home.” It’s important to remember you are not looking solely for the best deal…but the best home.

Tax Advantages Of Buying A Home In Fairfax and Vienna Virginia
Buying a home can give you a tax break. Here’s how: Mortgage interest (including points) and real estate taxes are tax deductible. That doesn’t sound very sexy, but it adds up. Since most of what you pay for your mortgage in the first year is interest, on a $200,000 mortgage at 4.25%, you get to deduct about $700 a monthin interest. That reduces your taxable income by about $8,400 a year. If you’re in the 25% tax bracket, that deduction is worthabout $175 a month.

To see the benefit, you can either wait for a big payout after you file your income-tax return, or adjust your withholdingsand keep your hard earned money. Your employer’s benefits department can help you with this.

Closing on a home purchase in Fairfax and Vienna Virginia before the end of the year may provide you some additional tax deductions for the current year. You may be able to deduct any money you pay for points to reduce the interest rate on your loan. Consult your tax advisor to see how the mortgage interest deduction applies in your situation.

Getting Started
Buying a home during the holidays could benefit your wallet for years to come, and there may not be a better time than now. If you are thinking of purchasing a home during this holiday season, get started now and call me to discuss your options.

Deductions in the Loan Process For Homeowners in Fairfax, Virginia

Write-offs are the government’s way of rewarding taxpayers when they’ve done something the government likes. And to judge by the write-offs, the government likes it when people borrow money to buy a house. There are write-offs aplenty, many of which people often forget.

Fairfax, Virginia homeowners need to make sure they take advantage of every break the IRS will give. Here are a few they tend to forget:

Points:
According to the IRS, origination fees charged as points must be paid for the use of money, (for example, to obtain a lower interest rate) in order to be tax deductible. Origination fees that constitute a “service fee” are not tax deductible. The question must be asked, “Does the fee apply to the use of money, or is it a service charge?”

Pre-payment penalties:
Unforeseen circumstances often cause borrowers to pull out of their mortgages sooner than expected. Fortunately, pre-payment penalties are tax deductible, which helps ease the pain.

Fairfax, Virginia Pro-rated real estate  taxes:
Even if the seller sent the tax collector the check, chances are the buyer paid a pro-rated portion of the taxes for the year at closing. Be sure they know to deduct their fair share.

Pro-rated mortgage interest:
Depending on when in the month the home sale closes, buyers pay either a hefty or a tiny amount of pro-rated mortgage interest for that month. Big or small, they can write that off. The Final Closing/Settlement Statement will show just how much they’re due.

Home construction loan interest:
As long as the construction period doesn’t last more than two years before they make the new place their “principal residence,” they can write off the interest for that construction loan.

It pays to pay attention – all these write-offs can add up to some serious savings when tax time comes around.