More individuals are applying for loans, especially since many first-time homebuyers are eager to get pre-approved and compete with the abundance of cash buyers.
Chicago, IL (PRWEB) August 22, 2013
Due to rising mortgage rates and assistance programs, first-time homebuyers raced to the market and bought new and existing homes in force in July. The Federal Savings Bank has also witnessed this increased activity last month.
"More individuals are applying for loans, especially since many first-time homebuyers are eager to get pre-approved and compete with the abundance of cash buyers" says Nick, a Banker at The Federal Savings Bank.
The State Journal-Register highlighted data from the Capital Area Association of Realtors' report revealing that home sales and median home prices in Springfield, Ill., experienced their highest levels in more than three years, impacted by the arrival of first-time homebuyers who may have been influenced by federal and state incentives. Even veterans programs, such as the VA home loan guaranty, buoyed home purchases.
"We had concerns early on that first-time homebuyers had not quite shown up yet," Don Cave, president of the CAAR, told The Journal-Register. "The slight increase in interest rates convinced some who were on the fence to jump in."
There were 397 home sales overall in July, a 12.1 percent jump year-over-year, while the median price rose 6.5 percent to $122,500. Pending home sales were also up 14 percent compared to the same time last year. The 520 pending home sales indicate a strong late-summer housing market performance.
Perhaps the most significant figure of all is the rise in median home prices. The number of foreclosed property sales accounted for 13.1 percent of all sales, with 52 foreclosed sales in July compared to 43 in June. Unlike many other regions around the country, where distressed property and foreclosed property sales are diminishing, Springfield's market has sold 363 foreclosed homes since January. Thus far, 2013 has outpaced the previous year by 14.3 percent regarding foreclosed sales. According to Cave, it's hard to ascertain when the pace of foreclosure sales will die down.
Utilizing first-time homebuyer programs
With first-time homebuyers becoming more active in the market, it is important that assistance programs and perks are leveraged to help buyers become homeowners. For instance, first-time buyers qualify for the Mortgage Credit Certificate, a tax credit that enables a dollar-for-dollar match on a designated ratio of mortgage interest a homeowner pays each year. While an MCC can be leveraged on most mortgage types, adjustable-rate mortgages are ineligible depending on the state and the program, as outlined by GoBankingRates.com.
The tax credit usually generates savings of 15 to 30 percent of the total interest amount a homeowner pays in one year. If you qualify, which is relatively easy and achieved by completing an application at the same time the mortgage application is submitted, an MCC can generate thousands of dollars in savings throughout the life of the mortgage.
Contact The Federal Savings Bank to discuss this first-time homebuyer program and other low-cost mortgage options to maximize your home financing needs.