The big news last week in the Mortgage Biz was the extension of the tax credit for first time homebuyers. This credit is actually worth, dollar-for-dollar, any taxes paid or due for this year or next, up to a maximum of $8000. The amount of the credit depends on a number of factors including purchase price, gross income, etc. * This means you have to have paid taxes, or owe them, to collect the credit.
The bigger news is that the credit was actually amended to include “move-up” buyers who owned a home in the last five years.
There is quite a bit of fine print to the guidelines-- including a maximum home price of $800,000.
Please call me with questions and if I don’t know the answers, I will find out.
My daughter Katie qualified for the credit this year after her purchase of a condo in Ann Arbor. The whole process went very smoothly post-closing and she received her refund check in a few weeks.
On other fronts, interest rates continue to exhibit volatility, but are still very attractive.
Mortgage backed securities are currently trading just below their earlier highs of the year. This translates to rates that are near bottom, and long-term these will begin to rise as our economy levels out and improves. As soon as the hint of inflation is on the horizon we will see movement towards increasing yields. Translation: higher rates.
The Federal loan programs to refinance loans owned by Fannie and Freddie continue. If your loan is currently owned by one of these entities, and you do not currently pay mortgage insurance, you will not have to pay for MI, even if your current loan balance is equal to 125% of current value. Rates are comparable to current market rates, with good credit scores. The big catch is, who owns your loan? You can check this out yourself on these websites:
http://loanlookup.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/index.html
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