First-Time Home Buyer Tax Credit Available Until July 1, 2009

The Housing and Economic Recovery Act was signed into law by President Bush on July 30, 2008. A key part of the legislation is the First-Time Homebuyer Tax Credit. Under the law, first-time homebuyers are eligible for a tax credit of 10% of the price of the home they purchasing up to $7,500. There are income limits of $75,000 for an individual and $150,000 for a family. Individuals earning up to $95,000 and families earning up to $170,000 are still eligible for a reduced credit. Keep an eye out for additional programs that become available to help stimulate the housing economy.

Mortgage Rates Hit Historic Lows!

As you may have read in the paper or seen on TV, the United States Treasury has taken a major step toward resolving the financial crisis by buying large quantities of mortgage backed securities (MBSs) from lending institutions. This creates a sense of demand for the MBSs and in turn drives up their value. Mortgage interest rates work in reverse of the value of MBSs. So – when MBSs are valuable, mortgage rates tend to fall. This is exactly what we are experiencing right now. As of 12/16/08, our 30 year fixed is at 4.875% and our 15 year fixed is at 4.75%. Historically, these are some of the lowest mortgage rates we’ve ever seen.

We have even heard talk recently of the Treasury creating a program that will provide incentive for banks to offer loans to consumers at 4.5%. As of now, this program is slated to be available only to those purchasing homes and not refinancing. The funds aren’t currently available and many people believe they won’t be until after President-Elect Obama takes office.
For those who recently purchased a home, you are eligible for a refinance after 90 days.