Congress looking to expand Homebuyer Credit

Congress is considering the expansion of the $8000 tax credit to include all homebuyers who meet eligibility requirements. There are several proposals now before committees that would expand the credit from $8000 to as much as $15,000. Currently the full credit is available to first time buyers who make $75,000 or less ($150,000 for joint filers) and a partial credit for individuals making between $75,000 and $95,000 ($150,000 to $170,000 for joint filers.) Those in favor of extending the credit's scope say that doing so will boost home sales, stabilize housing prices, and create jobs.

Mark Zandi, chief economist of www.MoodysEconomy.com favors extending the credit until June 2010 according to a recent post on that website. He cites the impact of housing on the economy as a whole.

(Thanks to e news from Franklin Mortgage for the facts cited above!)

Interest rates will rise

Yup....you are hearing it here, but did you know that as economies improve the Fed will be forced to increase interest rates? Used as part of the "toolbox" available to market regulators, interest rates tend to increase when inflation is on the rise. Inflation occurs when there is too much money chasing too few goods.(It is actually more convoluted than that...) People are afraid that the Fed has put too much money out there for the volume of goods being produced.
However, unemployment is still high, so the Fed is artificially keeping rates low for the time being, in an effort to assist businesses in getting affordable credit to create jobs. If people go back to work, more goods are produced and consumer demand increases......well, you get the general picture.

Eventually, rates will need to increase, or be increased, to remove money from the system. The hard part for homebuyers is that mortgage rates will increase , also, as the rates are tied to long term treasuries. For every quarter point of a rate increase, the homebuyer's monthly payment increases. This can limit the price of a house one can afford.

Why wait?? House prices are LOW, mortgage rates are LOW! A buyer can get the best deal seen probably since...........this writer doesn't know when!

NOW IS THE TIME!!!

The Perfect Storm

October is the month of crazy weather changes and conditions that led to the October Atlantic storm giving rise to the conditions that were featured in the book and movie of the same name. This October is a perfect brew of conditions that are the most favorable that homebuyers have seen in a long, long time!



First time buyers in particular should be out searching actively for their perfect home. Not only can they take advantage of an $8000 tax credit (money in your pocket), but in Maine can possibly qualify for another $5000 towards closing costs through the Green Money program at Maine State Housing. Combine this with rates near and below 5%.......well it should be a no brainer.



If your credit score is above 640 and you have some money saved, get out there. The house you choose must be closed by December 1, 2009. It takes 4 to 6 weeks to close.....