YOU Magazine - December 2010 - Home (of Your Own) for the Holidays? Now May Be the Perfect Time to Buy
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Brent Prockish     Brent Prockish
Brent Prockish Team at Total Lending Concepts
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Brent Prockish Team at Total Lending Concepts
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Home (of Your Own) for the Holidays?
Now May Be the Perfect Time to Buy

Home (of Your Own) for the Holidays? - Now May Be the Perfect Time to Buy

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, and especially during the holiday season, 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, rates 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
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 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
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
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 month in interest. That reduces your taxable income by about $8,400 a year. If you're in the 25% tax bracket, that deduction is worth about $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 withholdings and keep your hard earned money. Your employer's benefits department can help you with this.

Closing on a home purchase 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 discuss your options with your loan professional.

While interest rates and housing remain at historic levels, keep in mind: They won't stay this way forever. Contact the person who supplied you with this month's issue of YOU Magazine and spend time reviewing your situation today. After all, there has never been a better time in our history to purchase a home.

Total Lending Concepts NMLS #1043976 (Corporate) #2348348 (KS Branch) 6900 College Blvd., Suite 800, Overland Park, KS, 66211 (KS Office) 219 E Broadway, Columbia, MO. 65203 (MO Office)

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Brent Prockish Team at Total Lending Concepts
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Overland Park, KS 66211

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