Green Real Estate in Idaho

but your purchasing power is going to decrease in the new year when the FED scales back their purchasing of mortgage backed securities. The FED recently extended this program, but it is expected to begin being phased out in early 2010. This has been a great thing going, especially in recent months as we remain at historic, low rates. Unfortunately, this is an artificial low and as the FED scales back the purchase of these securities you will see mortgage interest rates rise. While I do not expect them to spike, even if we break into mid to low six percent range those are still great rates, but anyone who is trying to buy a home with a tight constraint on what they can spend per month will be unpleasantly surprised.

This can be hard to comprehend unless we assign some values to the narrative, really get our hands dirty. Ok, not too dirty, I know I don’t like to play with math on a Friday afternoon so we’ll keep it simple. Let’s say that you are looking at a home and you will be borrowing $150,000. We’ll say that your annual property tax bill on a home at this price will be $1,500/yr and that your home owners insurance will be $300/yr. We’ll say these are fixed costs for our example. Now let’s take a look at what your payment will be at 5.4% and 6.25%.

At 5.4% APR: Principal & Interest Payment is $842.29/mo, Insurance is $25/mo, Taxes are $125/mo. Your total payment PITI comes in at $992.29

At 6.25% APR: Principal & Interest Payment is 923.57/mo, Insurance is $25/mo, Taxes are $125/mo. Your total payment (PITI) comes in at $1073.57.

Clearly this is not the end of the world, but if your monthly mortgage payment can not exceed $1000 and remain affordable, you’re no longer going to be able to shop for $150,000 homes when rates go up. Almost an extra hundred dollars per month, every month for the life of your 30 year loan. Now, to buy a home and keep your payment below that thousand dollar threshold you have just seen the max loan amount available drop to approximately $138,000. Twelve thousand dollars just evaporated from your home buying budget in this scenario; the only thing that changed was a modest increase in the interest rate. Also, not the end of the world, unless of course you can’t find any homes that meet your criteria at this price range.

One can never know exactly what the future holds. While I frequently wish that my crystal ball wasn’t broken, I do know that if you need to make a move and can afford to buy a home, it’s a fantastic time to be a buyer. Will it be a fantastic time to be a buyer next year? Probably. But the unknown of what the interest rates will be doing and whether or not the FTHB tax credit will be extended could absolutely have a serious, and likely negative impact, on the kind of home that you can buy. While it’s probably to late to be considering a short sale purchase and expect to be closed by November 30, 2009 there is absolutely still time enough to start the hunt on a more traditional purchase. Rates are good, inventory is there and more and more homes are priced appropriately, if not quite aggressively to really stand out amongst the sea of short sale, foreclosed property still out there.

If you would like to get more information, see a list of potential candidates here in the greater Boise area, or talk about your home buying options please give me a call. You can reach me directly anytime at 208-991-HOME (4663). You can also enter your information in the phone link (top right of every page) and be connected to me in no time. If you’ve found your way here, but Idaho isn’t your destination of choice, feel free to call or email anyway and I will be more than happy to go to work for you (at no charge of course) interviewing agents anywhere in the country you’re moving to in order to find the right agent for you. I have had outstanding results putting my friends, family, and past clients in touch with agents in their soon to be new community that will work just as hard for them as I would.

If you’re a first time home buyer that has been sitting on the sidelines waiting for interest rates to improve (come on, they are at 5.5% which is FANTASTIC), or a better selection (Spring/Summer usually represent the largest inventory levels) your time to take advantage of the $8000 tax credit is fast expiring. In it’s current format you must be closed (funded and recorded) on your purchase before December 1, 2009. As of this writing that leaves you with exactly 81 days to get across the finish line.

While 80+ days sounds like a long time, keep in mind if you’re not in the process at all yet you need to sit down with a lender and get pre-approved. You need to find a good agent that will guide you through the process, representing your best interests, find the perfect house and then navigate the escrow process. A typical escrow (in our market) is about 30 days. This absolutely does NOT include short sales. If you don’t have a short sale in contract at this point and the tax credit is important to you, you’ve probably already missed that boat. Many banks (not all) have expedited things considerably over last year, but it can still be 60+ days for an approval and THEN you open escrow.

While the $8000 tax credit certainly isn’t a deal breaker… I find that most people think the idea of getting $8000 vs not is pretty cut and dry. If buying your first home is on your list of things to do, now is the time to get into the game. Interest rates are still fantastic, prices are still down, and there are still some fantastic gems to be found. Granted, they are moving quickly, especially in the sub $200,000 price range. If you’re ready to make the dream of home ownership a reality, I’m ready to get to work for you to make that happen. Call or email me today!

Ben
208-991-HOME (4663)
ben[at]IdahoRealEstate.com

Moving to a new community can be confusing and stressful in it’s own right, the last thing you want to do is spend hours searching the web or calling various agencies to try to figure out what school district your children will be in at a new home. Some people base their moves on a particular district, so moving into or outside of a particular district can be a major cause of concern.

For those of you considering a move to the Treasure Valley, at least into the Boise or Meridian school districts, I have something that will help. Parents interested in reviewing the boundary maps for the Meridian School District can do so here. The Boise school district has a handy dandy mapping utility you can use to determine elementary, middle, or high school for a particular home. Get started on your Boise School search here.

Don’t let this bog you down, if you need help planning your move and schools are a concern (or even if they are not), give me a call and I will be happy to get right to work. I will take over the coordination of your move to ensure that it goes of as smoothly as possible!

One of the many benefits of home ownership are the associated tax benefits (aside from the ever popular “roof over your head” benefit). Many home owners have heard whispers, rumors, or stories of fantastic tax advantages associated with “greening” their current home.

This is in fact true, but what qualify for by doing x, y, or z improvements does vary depending on where you’re located. If you are considering improvements keep in mind the tax incentives are only part of the equation. Switching to high efficient windows, appliances (fridge, washer, dryer, water heater, etc) or the like will not only have positive tax consequences but you can almost certainly expect to see a reduction on your utility bills immediately that will also continue to save money over the long term. Programs range from personal deductions, private grants, tax exemptions, sales tax refunds, utility loan programs and rebates.

Check out the specifics at the DSIRE website. For the Idaho specific info go HERE.