NH Homebuyers, like homebuyers across the country, are taking a cautious "wait and see" approach to their home buying plans and that ,for many reasons, is a prudent approach to the home buying process. As we have watched home prices decline, those NH homebuyers sitting on the sidelines are feeling pretty good about their decision to hold off on buying. One of my clients, just yesterday, benefited greatly from this strategy as the house he placed a bid on less than two months ago (offer declined because it was too low) came back on the market and his great real estate agent notified him immediately and now he's getting the home at a bit lower of a price than he had offered just a short time ago!

The one note of caution I would put into this strategy right now, though, is time.

There are two important changes in just six short weeks that will have a pretty significant impact on NH first time home buyers and buyers accross the country.

First, FHA is increasing their down payment requirements effective January 1, 2009. The minimum down payment requirement for FHA will change from the current 2.25% to 3.5%. Now that doesn't seem like a lot but it represents a more than 50% increase in the down payment needed! If a home goes under agreement prior to January 1 and the lender obtains their FHA case number prior to that date, the current, lower down payment requirement will be in place. 

Just think of a NH home purchase amount of $200,000. The minimum down payment, currently, would be $4,500. If the same home goes under agreement after January 1st, the down payment requirement will be $7,000! That's a lot of extra cash for a delayed decision! please know that I am not recommending a rushed decision. This is just one more piece of important information that you need to have in this very important decision making process.

The second item isn't really a change but more of a timing issue. The federal government is providing a First-Time Homebuyer Tax Credit which, if you qualify, is a pretty good deal for most people, in my opinion. This provides up to a $7,500 tax credit that can be used in preparing your tax return for the year that you purchase your home. In other words, if you purchase a home in December of this year, you would be eligible to use this tax credit in just a few months when you file your tax return for 2008. On the other hand, if you purchase a home in January you would not be able to take advantage of this tax credit until sometime in 2010 when you file your tax return for 2009. I don't know about you but if Uncle Sam is offering me money, I'd rather it sooner than later!

Again, none if this info is provided to make you feel like you have to buy now! This is to help frame the conversation a bit more. If you've found a home in NH that you like, then acting sooner rather than later may be a good move!

For more information on the First-Time Homebuyer Tax Credit, including a brief over view to download, or for NH home loan information in general, please visit our websites and best of fortune in you home search!