Life...Fun and Kentucky Real Estate

Every now and then you just have to revamp things. I guess you've noticed it's been about a week since I have posted on my blog. I've taken a little time to make changes in the office like buying new computers. It sure is nice to have these Windows 7, Asus computers with loads of memory.

Also by tomorrow, I will install the Sprint wireless Hotspot for my Internet connection. I had been using mySprint aircard but could not use it on all the computers like I will be able to with the Hotspot. Once activated, we will have access to all computers within 150 feet. My assistant Jane is going to love this!

Ahhhh....change is good. I like to change things up all the time. Like hairstyles and clothes. It's exciting what is going on in my office now that we are headed into the 2nd year. New ideas and deals in the works. Nice to always have something to look forward to.

Lexington KY First Time Home Buyers - Tax Credit Advantage - Buyer's Costs of Delaying

Lexington KY First Time Home Buyers that have been delaying in purchasing a new home might want to reconsider. Many have waited through the holidays to get started finding a home in Lexington KY.

I have a chart below that was prepared by Charles Dailey, to show the costs of waiting to buy a home. Time will go by fast before the deadline and you will need to have your contract written and be in escrow by April to get the tax credit advantage for those that qualify.

Get off the fence and let's get touring some Lexington KY homes for sale now!

Below is a mortgage expert, Charles Dailey's explanation of why you should not delay and take advantage of the tax credit.

Via Charles Dailey (iLoan):

Ever since the first version of the first time home buyer tax credit, home buyers have been eager to engage but uncertain about home values and for some, this has caused them to sit on the sidelines. 

I am not writing to suggest that this consideration is good or bad cause for not taking advantage of the first time home buyer tax credit.  I'm strictly writing from the perspective of a financing nerd. 

Two influences will converge in April of next year that should serve as the decisive factors for causing first time home buyers to understand that this time, waiting will have a cost.  What's more, that cost can be quantified.

 The first factor concerns the expiration of the first time home buyer tax credit.  Sen. Benjamin Cardin introduced S.B. 1678 with bi-partisan co-sponsors (including Harry Reid) and it will only extend the credit for 6 months from its expiration date. 

The 6 month extension was a disappointment for those who were hoping for a 12 month extension but Zillow estimated that a 12 month extension would cost approximately 14.86 billion based on current trends if that were to happen and 6 months seemed to be the fiscally responsible compromise. 

This bill would set the tax credit to expire at the end of May and it doesn't look likely that it would be extended barring a double dip recession.  It did not pass overwhelmingly and there was a of of opposition to the cost.

The second factor has to do with Ben Bernanke and the Fed.  In an effort to keep mortgage rates low and the secondary market machinery of the mortgage industry working, the Fed agreed to purchase 1.25-1.45 trillion dollars of mortgage backed securities.  Estimates of the impact of this effort on interest rates ranges from lowering them by 0.375% to 1 % but I find 0.5% to be credible.  The MBA rate forecast also lends credence to this assumption (shows rates going to 5.7 by year's end). 

The Fed has announced that they will bring an end to this effort by March of 2010. 

Consequently, we can expect a bump in rates in April of 2010 barring a double dip recession.  What's worse is that there have been rumors that the Fed is doing to start selling some of what they bought and this could have the effect of driving rates up faster.

These two changes could cost first time home buyers tens of thousands of dollars if they don't act in time.  Not only does an interest rate that's ½ of one percent lower create a lower monthly payment but it pays down the principal balance faster on the front end of the amortization cycle. 

If these two factors are added to the value of the tax credit, the exact loss (financially speaking) to first time home buyers can be calculated if the assumptions are to be trusted. 

Here are some examples:

Purchase Price	$125,000.00	$150,000.00	$200,000.00	$225,000.00	$250,000.00	$275,000.00	$300,000.00	$325,000.00
Loan Amount	$120,625.00	$144,750.00	$193,000.00	$217,125.00	$241,250.00	$265,375.00	$289,500.00	$313,625.00
10 year monthly payment differential assuming ½ point change to rate	$4,482.53	$5,379.03	$7,172.04	$8,068.55	$8,965.06	$9,861.56	$10,758.07	$11,654.57
10 year amortization differential assuming ½ point change to rate	$1,446.21	$1,735.45	$2,313.93	$2,603.17	$2,892.41	$3,181.65	$3,470.89	$3,760.13
tax credit	$8,000.00	$8,000.00	$8,000.00	$8,000.00	$8,000.00	$8,000.00	$8,000.00	$8,000.00
Potential Loss of Waiting	$13,928.74	$15,114.48	$17,485.97	$18,671.72	$19,857.47	$21,043.21	$22,228.96	$23,414.70

While it may have been unclear before as to when the right time to jump into the market might be, these factors combine to calm some nerves because even if home values do dip again at the end of the year, the savings from the combination of capitalizing on lower rates combined with the tax credit should offset value drops, should they occur. 

Zillow's analysis of current market trends shows that, if the credit had been extended for 12 months, a total 1.86 million first-time home buyers would purchase homes between Dec. 1, 2009 and Nov. 30, 2010. 

We didn't get the credit extended that far.  I wonder how many are going to pack those plans into the first part of the year. 

Well we've got less than six months now so let's saddle up!

Get started below...

Lexington KY Homes For Sale

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Lizette Fitzpatrick- Principal Broker at Lizette Realty.

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 Copyright ©2010 *Lexington KY First Time Home Buyers - Tax Credit Advantage - Buyer's Costs of Delaying*

 

There's nothing like a little dancing and some funky moves to make your spirit soar.

Put down your coffee, get up out of that chair, turn up the volume

and click play on this this video.

You may want to play it twice and then forward it on.

This song and dance was performed by the Black Eyed Peas

and thousands of people in Chicago for Oprah.

There is no path...you make the path as you walk...

Lizette Fitzpatrick- Principal Broker at Lizette Realty.

Publisher/Author for the only Central Kentucky email newsletter on local real estate listings and sold properties, Kentucky relocation, local events, homeowner information and fun!

Career opportunities in Lizette Realty 

Where's my coffee? I was thinking of getting up hours ago but then the thought just drifted away and I was back asleep. Chanel my puppy is making that impatient sound like a pig huffing to irritate me into getting out of bed. Well...it's working. Who needs an alarm clock??

Now I'm up to open the drapes and I can see that it has been snowing. O great! My mind starts clicking ahead to what I need to do today. Would snow be a problem?

When you work in real estate, the weather plays a major factor in how we plan tours for our clients. For one thing you have to find where you stored those long johns you used last year for skiing!

I finally find them and realize that I must have gained about 20 pounds during the holidays when I was submersed in all that chocolate! 

Man...these things are tight and now I have to squeeze into the jeans too. Whew! Now I know what Ralphie's little brother felt like in that snow suit!

As I glance over at the computer in my home office, I see that the temperature outside is a balmy 7 degrees!

I'm not really a cold weather lover and the agenda for the day is new construction. There won't be any heat circulating anywhere unless I am in my car.

Mentally, I walk through where we will go and the line up of listings. The clients will follow behind in their own car. I plan it just right so I will end up near to where I live. Am I smart or what?!!!

Within a few frigid hours we are done and the client needs to narrow down the favorite houses. It was a good time in spite of the cold. It's always nice to work with clients that are serious about finding something quick. When you only have 30 days to move...you really do get focused on a plan.

Even though I'm finished for the day, it doesn't end once I get back to the home office. I did promise more information like a seller's disclosure and utility report so the client can compare listings. The listing agents need to be called.

Also, comps of the area need to be researched. The day doesn't end right at 5 PM like it does for regular jobs. Even with the listings that didn't work out... it's nice to call those listing agents if I get time.

Whew! It's already 10PM and I'm emailing other clients that need pictures, phone numbers, directions, etc.

Where does time go?? It's all in a day's work in real estate. So I fall asleep and do it all over tomorrow...maybe. 

There is no path...you make the path as you walk...

Lizette Fitzpatrick- Principal Broker at Lizette Realty.

Publisher/Author for the only Central Kentucky email newsletter on local real estate listings and sold properties, Kentucky relocation, local events, homeowner information and fun!

Career opportunities in Lizette Realty