- First-time homebuyers will continue at $8,000 -- same definition as current law.
- Tax credit for “move up” purchasers will be up to $6500.
- Must have used previous home as a principal residence for 5 of the 8 previous years.
- Income limits increased and are the same for first-time and “move up” purchasers : $125,000 for single filers/$225,000 for joint filers.
- Limitation on eligible home prices has been increased to $800,000.
- Time Frame: December 1, 2009 to April 30, 2010 plus 60 day extension if binding contract is in place by April 30, 2010
Thursday, October 29, 2009
Tax Credit Proposal Is Improved & Getting Closer
There apparently is an agreement on the details of an expanded and extended credit. No vote has occurred yet. The issue is now caught up in Senate procedural matters. However, there is optimism that it will be resolved this week. The provision would still have to be passed by the House. Below are the details of the new tax credit program.
Wednesday, October 28, 2009
Rate Update
Economic data started coming in early this morning. The Mortgage Bankers’ Association released their Weekly Application Index at 7am. This index tracks the weekly change in mortgage applications at major lenders. Much like last week’s report, today’s report continues to show more weakness in the housing market. Applications for home purchases fell 5.2% and the refinance activity posted a 16.2% drop! With interest rates edging higher last week, it is not surprising to see a drop in the refinance activity. With the first time home buyer tax credit still in effect, it is troubling to have a couple weeks in a row with much less demand.
I recommend floating today.
I recommend floating today.
Tuesday, October 27, 2009
Should You Go For A Mortgage Refinance?
There are two common situations which lead people to consider refinancing their mortgage. One is to save money by taking advantage of lower interest rates. The other is to manage an unwieldy debt repayment situation. If you are currently looking out to refinance your existing mortgage here are some important points you should consider very carefully.
Maybe you have a number of small monthly repayments and these are becoming increasingly difficult to manage. You can refinance the mortgage and get a loan large enough to pay off all the small debts at once. You can then concentrate on paying a single monthly repayment. This makes things more manageable.
If you’re keen on saving money by reducing the interest burden of your current mortgage, then getting a fresh financing scheme may help you save a sizable sum of money. This works if your current mortgage is linked with the variable market rate, the current interest rate is very high and the market trend shows no inclination of climbing down. You can save a lot of money by opting out of your current mortgage and getting it refinanced. The secret is to get a fixed-rate loan with a reasonable interest rate.
Whatever the reason for refinancing, you should study all aspects of this important decision very carefully. The one thing you should understand is that while refinancing your mortgage could save you a packet, it could just as easily cost you a packet. Refinancing can hurt you in certain situations.
Refinancing is not as sweet as it looks. There are a number of fees that have to be paid for refinancing the mortgage which are not disclosed to you. It’s only after you have gone too far into the deal to turn back that you are made aware of these hidden charges. Be persistent in finding out all the nitty-gritty details about these hidden fees from people who have already taken a refinance. Deduct these fees from the total savings you expect to make. If the money saved is reduced to an insignificant amount, you might as well stay with your current plan.
When you consider refinancing, the first thing to do is to survey the market. Find out all the plans and schemes being offered by different companies. Make a comparison chart showing all the salient features and savings of each plan. Don’t restrict your survey to just your local companies. Go online and get information on various plans offered in your area.
Find out all the penalties and fees that refinancing companies may extract from you upfront. For example, there is an origination fee or points, which is taken before the refinance plan becomes operational. There might be a plan where the interest rate is slightly higher but you don’t have to pay origination fee. This may turn out to be better for you.
Refinancing is advisable if your net savings is significant. If not, you may as well keep the current mortgage going. Don’t go in for refinancing if you think you may have to move before the fresh mortgage period has time to play itself out. Such a move will require you to foreclose the fresh mortgage which entails a huge penalty!
Mortgage refinancing is a good way to save money by taking advantage of reduced interest rates. It is also a good way of dealing with a troublesome debt repayment position. But you must be aware of all the costs that are involved. Not knowing the true costs leaves you open to nasty surprises later on. Many people who went in for mortgage refinancing without proper analysis found that they had actually lost money instead of making the savings they had counted on!
Maybe you have a number of small monthly repayments and these are becoming increasingly difficult to manage. You can refinance the mortgage and get a loan large enough to pay off all the small debts at once. You can then concentrate on paying a single monthly repayment. This makes things more manageable.
If you’re keen on saving money by reducing the interest burden of your current mortgage, then getting a fresh financing scheme may help you save a sizable sum of money. This works if your current mortgage is linked with the variable market rate, the current interest rate is very high and the market trend shows no inclination of climbing down. You can save a lot of money by opting out of your current mortgage and getting it refinanced. The secret is to get a fixed-rate loan with a reasonable interest rate.
Whatever the reason for refinancing, you should study all aspects of this important decision very carefully. The one thing you should understand is that while refinancing your mortgage could save you a packet, it could just as easily cost you a packet. Refinancing can hurt you in certain situations.
Refinancing is not as sweet as it looks. There are a number of fees that have to be paid for refinancing the mortgage which are not disclosed to you. It’s only after you have gone too far into the deal to turn back that you are made aware of these hidden charges. Be persistent in finding out all the nitty-gritty details about these hidden fees from people who have already taken a refinance. Deduct these fees from the total savings you expect to make. If the money saved is reduced to an insignificant amount, you might as well stay with your current plan.
When you consider refinancing, the first thing to do is to survey the market. Find out all the plans and schemes being offered by different companies. Make a comparison chart showing all the salient features and savings of each plan. Don’t restrict your survey to just your local companies. Go online and get information on various plans offered in your area.
Find out all the penalties and fees that refinancing companies may extract from you upfront. For example, there is an origination fee or points, which is taken before the refinance plan becomes operational. There might be a plan where the interest rate is slightly higher but you don’t have to pay origination fee. This may turn out to be better for you.
Refinancing is advisable if your net savings is significant. If not, you may as well keep the current mortgage going. Don’t go in for refinancing if you think you may have to move before the fresh mortgage period has time to play itself out. Such a move will require you to foreclose the fresh mortgage which entails a huge penalty!
Mortgage refinancing is a good way to save money by taking advantage of reduced interest rates. It is also a good way of dealing with a troublesome debt repayment position. But you must be aware of all the costs that are involved. Not knowing the true costs leaves you open to nasty surprises later on. Many people who went in for mortgage refinancing without proper analysis found that they had actually lost money instead of making the savings they had counted on!
Monday, October 26, 2009
First Time Home Buyer Tax Credit $8,000
On Monday, October 5th, the White House came very close to endorsing an extension for the First Time Homebuyer Tax Credit. The White House Press Secretary said it had been a very successful program and is on a “short-list” of measures being considered to help further bolster the economy in its recovery. The likely-hood for an extension of the Tax Credit has been significantly improved (as much as 90% likely to pass). There has been no indication of the Tax Credit being revised that would increase the credit above the already available $8000 limit or offered beyond first-time homebuyers within the qualifying guidelines.
What does this mean?
Unless the Tax Credit provision is made a “stand-alone” bill or attached to an existing bill, a continuation in the program may mean there would be a lapse in availability for First Time Homebuyers, possibly in early December - since tax bills usually move at the end of the year (late December).
It is speculated that a steep drop in home prices may unravel as the current First Time Homebuyer Tax Credit is left to expire December 1st, further denying economic recovery.
If extended, the $8000 Tax Credit program would cost the government approximately $1 billion for each month it is extended as talks are in place that would determine how long it will be extended.
Further details on the possible extension of the First Time Homebuyer Tax Credit will be published when they become available.
What does this mean?
Unless the Tax Credit provision is made a “stand-alone” bill or attached to an existing bill, a continuation in the program may mean there would be a lapse in availability for First Time Homebuyers, possibly in early December - since tax bills usually move at the end of the year (late December).
It is speculated that a steep drop in home prices may unravel as the current First Time Homebuyer Tax Credit is left to expire December 1st, further denying economic recovery.
If extended, the $8000 Tax Credit program would cost the government approximately $1 billion for each month it is extended as talks are in place that would determine how long it will be extended.
Further details on the possible extension of the First Time Homebuyer Tax Credit will be published when they become available.
National Average Rate Update
Today rates are rising because the Treasury Department will auction $123 billion in debt this week.That said, one might ask...Record Treasury debt has been a constant for ten months, rates haven't backed up this much in any of those instance.
Sunday, October 25, 2009
National Averages and Rate Update
30 Yr FRM 5.00% Up 0.08%
15 Yr FRM 4.43% Up 0.06%
1 Yr ARM 4.54% Down 0.06%
5/1 Yr ARM 4.40% Up 0.02%
Rates are up today as we got positive news from Existing Home sales, they were up to 5.57m. Most importantly inventory shrunk to 7.8 month supply, down from 10.1 in April. Bonds have broken thru important support levels, and this is will increase rates even more.
15 Yr FRM 4.43% Up 0.06%
1 Yr ARM 4.54% Down 0.06%
5/1 Yr ARM 4.40% Up 0.02%
Rates are up today as we got positive news from Existing Home sales, they were up to 5.57m. Most importantly inventory shrunk to 7.8 month supply, down from 10.1 in April. Bonds have broken thru important support levels, and this is will increase rates even more.
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