On Friday, November 6, 2009 President Obama signed into law an extension and expansion of the homebuyer tax credit that extends the $8,000 First-time Homebuyer Tax Credit to next spring. Under the new law, qualifying buyers would have until April 30, 2009 to go under contract on a home and until June 30, 2010 to close on that home.
The new law also helps current or recent homeowners. Under the new law, any qualifying buyer who has lived in their previous residence for at least 5 consecutive years of the past 8 would have the opportunity to purchase a new home and receive up to $6,500 in tax credit. Neither tax credit would have to be repaid as long as the new home was retained for a minimum of 36 months.
The expansion of the old law will hopefully help out one issue that this law has caused in many areas of Maine and New Hampshire, a lack of “entry-level” priced homes. For example, as the first deadline drew near, many prospective buyers who did not act quickly were found with a very limited selection of homes in the $150,000 or less range in the Southern Maine area. Similar situations were reported in other areas.
Another issue that came up beginning in mid-October was that so many buyers came in to the market all at once to take advantage of the credit last minute that many Realtors, Mortgage Brokers, Mortgage Underwriters, Appraisers and certain government agencies, such as the Rural Housing Service found themselves swamped causing major delays in the process. Many professionals involved in the process wondered how so many deals would get closed on time, prior to the November 30 deadline.
Luckily, this extension takes some of the pressure off and will allow everyone to get caught up and get everything back to normal for a while.
If any lesson was learned from, it was this: Don’t wait until late winter or early spring to start shopping if you think you might want to take advantage of this program before it likely goes away once and for all. As this latest deadline neared inventories got tight, the availability of professionals was stretched thin and the turn-around times at all the lenders sky-rocketed.
Get in touch with a Mortgage Broker , get your pre-approval letter and start shopping. Even if you don’t make contact with a Realtor right away a pre-approval letter will at least open up your communications with a lender and will give you an idea of how much home you can afford. With this information you can search listings online and see what areas and types of homes you can likely afford. Once you get an idea of where and what you want to “seriously” start viewing then it is time to call a Realtor and start physically looking.
The other advantage of starting right away? If your credit needs a little improvement, starting now will give your Mortgage Broker adequate time to advise you on ways to boost your credit scores and get your report where it needs to be before the next deadline looms.
For a free credit and mortgage analysis call our office today at (866)602-9751. Click here to get approved online 24/7 or call us toll-free during regular business hours.
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