Make no mistake, the market is as gray as February skies.  But a bit of blue is appearing. Increasingly, first-time home-buyers are moving into the market taking advantage of low prices and comparatively good mortgage interest rates.

Just a few years ago, a buyer could not find a home without competing with multiple offers.  In today's market, the inventory is high and buyers have many houses to choose from without rushing through, they have time to compare and make decissions. The best part for buyers is that they don't have to over spend either. Seller's know that in order to get their homes sold, they have to conceed to some buyer's requests and accept offers that are less than the asking price.

The market is in the buyer's favor no doubt about that.  Even the goverment is helping with the new bill just signed by President Obama.  First time buyers can now get a $8,000 tax credit if they purchase a home within January 1, '09 and Novebember 30, '09. 

Take all of these factors and add an FHA loan with a 3.5% down or a VA loan and you may end up with nearly a zero money out of your pocket to purchase a house.

Here is an example; take a home listed for $250,000, ask the seller to pay for closing costs, get a 3.5% down FHA loan and get $8000 back from uncle Sam.

Selling Price= $250,000

3.5% down = $8750.00 (250,000 x 0.035)

Tax credit = $8000.00

Balance = $750.00 this your actual cost to get a house.

Too good to be true? It is true!, but here is the catch:  You must purchase the house and live in it for the next 3 years otherwise you have to pay back the $8000.00 to the goverment. Not a bad request from uncle Sam in my opinion.  The other point to note is that you still need to the $8750.00 in cash to initiate the purchase of the house.  The $8000.00 from uncle Sam will come to you later when you file your tax return.

Read the article published by CNNMoney.com here >>