CNC Mortgage Blog

Home buyers, both first time homebuyers are reaching a small milestone at the end of April this year. On that day purchase agreements need to be signed to qualify the tax credit offer for buyers from the Federal government. That is $8,000 for first time buyers and $6,500 for repeat buyers.

We don’t know if that tax credit is going to be extended. It was already extended in November. I heard MN Senator Amy Kloubichar this week on the radio saying that it might be extended. Some people feel that it has not helped enough to promote purchases. Of course it has been in place during the slow home buying season. An $8,000 tax credit should not be the driving force to invest $200,000 in a new home but it is an incentive to be considered.

More important are two considerations. One is that housing prices I believe are close to the bottom so they will probably stabilize or start to go up. That house could cost you more soon. The second is that we have seen mortgage rates creep up in the last few months. One pundit predicted 6% on 30 year mortgages by the end of this year. That 1% is $45,165 in additional interest over 30 years when you compare a $200,000 loan at 5% and 6%.

Keep in mind that the purchase agreement needs to be signed by April 30 and that the closing must take place by June 30, 2010.

Happy house hungting!