brown on green Recommending Real Estate Brown on Green is a regular column written by Free Will Baptist Foundation Director David Brown. The column offers financial advice, addresses hot-button business topics, and answers your finance questions. Contact David with your anonymous question: david@nafwb.org.

In spite of the current financial crisis, right now is a great time to buy your first home! First time homebuyers qualify for an $8,000 tax credit on homes purchased before December 1, 2009. In addition, rates for a 30-year, fixed-rate mortgage are averaging 5.15%, which is quite low.

Buying a home at this rate could knock $130 off the monthly payment on a $160,000 mortgage compared to rates a year ago. Still another reason to buy is that home prices have been falling rapidly.

Some areas of the country have seen real estate values decline over 30%, and nearly every region has seen at least a 10% decline. Foreclosures and a glut of unsold homes on the market are driving prices lower. First-time homebuyers may wish to purchase a fixer-upper and use the $8,000 tax credit to make the needed repairs. Those who once thought the purchase of a home was out of reach may be surprised to discover they can now afford to buy.

For example, a year ago they would pay a monthly mortgage payment of $1,060.87 on a home priced at $220,000, assuming a 6.05% rate with 20% ($40,000) down. Today, the same monthly mortgage payment on that home would be $834.64 because the home price is now $200,000, and the rate has dropped to 4.75% with 20% ($40,000) down. Buyers can save $225 each month, plus they will receive the $8,000 credit to pocket or to use on home improvements.

There is one catch. Due to the credit crunch, only highly qualified buyers need apply. The best terms and rates will go to those who have a 20% down payment. If that’s you, and you have been waiting to buy your first home, now is the time.

What do I need when applying for a loan?

• Social Security number for both applicants

• Copies of checking and savings accounts for past six months

• Recent paycheck stub detailing your earnings

• List of all credit card accounts

• List of car loan(s) and any other outstanding loans

• Copies of last two years’ income tax returns

• Name of person(s) who can verify your employment

About the columnist: David Brown is the director of the Free Will Baptist Foundation. Learn more about how the Foundation can help you give more effectively at www.fwbgifts.org.