Time is growing short for buyers hoping to land a great deal before some key changes occure.
Later this spring, the federal home buyer tax credit — up to $8,000 for first-time buyers and up to $6500 for move-up buyers — is scheduled to expire. Buyers must have their new home under contract by April 30th to receive these funds.
Mortgage rates may also bigin to climb soon. In late 2008, the federal government began a $1.25 trillion campaign to purchase mortgage backed securities, driving borrowing costs lower. The fed confirmed yesterday this program will expire in March. Consequently, mortgage rates will rise anywhere from half a point to a full point.
We’ve had these low rates for a year and people think they are where they should be, but they are not. Rates are artificially low right now due to the fed’s purchasing program.
When rates do move higher when the program expires, shoppers waiting for the absolute bottom of the housing market may regret their procrastination. A slight increase in interest rates can erode any savings achieved through a low interest rate.
Also, FHA loans will become more expensive this spring. Currently FHA loans account for more than 40% of all new mortgages being originates. This spring the up front mortgage insurance premium on FHA loans will go from 1.75% to 2.25% this spring.
Take advantage of these tax credits and make 2010 the year you find your perfect home!
Call Dale Curtis at WaterStone Mortgage 208-484-8993 and tell him Josh Groesbeck of Trust Realty (208-353-7131) sent you-