THREE REASONS NEW JERSEY HOME BUYERS
CAN'T AFFORD TO WAIT
(Edison, NJ) New Jersey residents might have
heard a lot about waiting for the real
estate market to "bottom out" lately from
real estate speculators and financial
pundits, but before deciding to wait on the
sidelines, home buyers need to first
consider three timely reasons why waiting
can end up costing them.
"No one can time the market perfectly," said
2008 New Jersey Association of REALTORS®
(NJAR®) President, Drew Fishman. "We really
won't know when home prices have officially
'bottomed out' until they start to go up.
That's why interested home buyers who are
financially capable can't afford to let
these opportunities pass them by."
The Federal Housing
Administration (FHA) will require a
higher down payment percentage after
January 1, 2009. The Housing and
Economic Recovery Act passed by Congress
in July raised the down payment
requirement on FHA loans to 3.5 percent,
up from the current requirement of 3
percent.
FHA, Fannie Mae and Freddie Mac
mortgage loan limits will drop after
January 1, 2009. The February 2008
Economic Stimulus Package temporarily
raised the FHA loan limit to $729,750 in
high cost areas through December 31,
2008. According to the Department of
Housing and Urban Development (HUD),
beginning January 1, 2009, FHA will
insure single-family home mortgages in
New Jersey up to $417,000 in low cost
areas and up to a maximum of $625,500 in
high cost areas. Buyers purchasing homes
in Bergen, Essex, Hudson, Hunterdon,
Middlesex, Monmouth, Morris, Ocean,
Passaic, Somerset, Sussex and Union
counties will be affected by the new
lower maximum loan limit. Loan limits in
the remaining New Jersey counties will
vary based on the median home price
indicator used by FHA. Depending on the
area, some buyers in these counties may
also face lower limits. Fannie Mae and
Freddie Mac insured loans will also drop
down to the lower limits as of January
1, 2009, according to the Federal
Housing Finance Agency (FHFA). More
information is available at
www.fha.gov and
www.fhfa.gov.
First-time home buyers can only
take advantage of a $7,500 tax credit
until July 1, 2009. The 2008 Housing
and Economic Recovery Act (HERA) became
law last July and included a new,
temporary tax credit for buyers who have
not owned a home in the past three
years. To qualify, buyers must purchase
a principal residence on or after April
9, 2008 and before July 1, 2009 to
qualify for the tax credit when filing
their federal tax returns. Individual
buyers with an adjusted gross income of
less than $75,000 and joint filers with
income no more than $150,000 are
eligible. Individual buyers with income
of up to $95,000 and couples with income
up to $170,000 are eligible for a
partial credit. The credit is repaid in
6.67% increments over 15 years making
it, essentially, an interest-free loan.
For an overview of the tax credit, visit
http://www.njar.com/government_affairs/issues/federal/pdf/tcchart.pdf.
NJAR® is encouraging New Jersey residents to
Get the REAL StorySM on real estate in New
Jersey with a public education campaign that
features an informational website and
advertising campaign that also features real
stories from recent buyers and sellers. For
more information on the campaign, or simply
to Get the REAL StorySM on real estate in
New Jersey, visitwww.REALstoryNJ.com.
The New Jersey Association of REALTORS®,
with approximately 53,000 REALTOR® and
REALTOR-ASSOCIATE® members, is one of the
largest trade organizations in the state.
NJAR®'s membership is comprised of real
estate professionals who subscribe to a
strict code of ethics and are members of the
national and local REALTOR® organizations.
As the leading advocate for the real estate
industry and private property rights in New
Jersey, NJAR® is committed to protecting the
dream of homeownership. For more
information, please visit
www.njar.com.
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