Rates on the Rise as Ecomony Improves

I hope you are not one of those buyers waiting for a further reduction in housing prices to make your move. If so, you may be in for a little shock. Rates for 30 year mortgages have been rising rapidly for over a month, now approaching a level over 5%. Just a little while ago, rates were in the low 4% range.
A 1% rise in the rate equates to a 10% reduction in buying power. House prices are not falling that fast so buyers are essentially losing ground if they are waiting for those lower prices. Many buyers are now finding that they are no longer approved for the same amount with this increase in rates. Get with your mortgage person and ask for an update and how these higher rates affect your buying power. There is still going to be a lot of regulatory changes as we head into the new year and I will keep you informed. Have a wonderful Holiday Season!

Some Have Another Year to Find a Home & Get Tax Credit!

Question - Does the tax credit end for everyone that has not signed an offer to purchase by April 30?

Answer - NO!! Any member of the military, Foreign Service, or intelligence community that has been assigned on extended duty outside of the U.S. for a period of at least 90 days from January 1, 2009 to April 30, 2010, can still take advantage of the tax credit until April 30, 2011. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
 
Complete details and IRS forms are available at http://www.giveme8000.info/.

Mortgage Costs Are Going Up

When the Fed pulls out of buying Mortgage Backed Securities later this month, analysts are predicting an increase in mortgage interest rates of anywhere from .25 - .50%. On April 5th, any new buyer seeking a FHA mortgage will see closing costs increase also. The Up Front Mortgage Insurance Premium (UFMIP) will go up to 2.25%, up from 1.75%. The first time and move up buyer tax credit goes away on April 30th. If you are planning to purchase a home, now is the time so you can keep your costs down.