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Bill To Extend the First Time HomeBuyer Tax Credit to All Buyers

By
Mortgage and Lending with CNN Mortgage

Georgia republican senator Johnny Isakson, introduced S. 1230, the Homebuyer Tax Credit Act of 2009. This bill would increase the maximum amount of the credit from $8,000 to $15,000 and expand the current tax credit to apply to ALL home buyers (not just first time home buyers.  This bill would eliminate income caps under the current tax law so that there is no income limit for eligibility, and extend the tax credit for an additional year for home purchases made in 2010.   

The current $8,000 tax credit has been partially responsible for helping to stabilize the First-time home buyers market for homes at the lower price points.  Isakson's rationale is if the tax credit can be applied by "move up home buyers", the higher priced home values would begin to stabilize as well.   Sounds good, but will this bill have the same affect on the move up market that it has on the lower priced homes?    Unemployment rates are still too high, affecting business owners' income.  Credit policy for jumbo financing is very tight.  In declining value markets, maximum financing for loan amounts that exceed the conforming loan balance are maxed at 70% loan to value.  The Mortgage Bankers Association of America is supporting the bill to expand the reach of the tax credit: MBA supports bill for $15,000 tax credit

Remember a Bill must be passed by both the House and the Senate before being signed into law by the President of the United States.

Interest rates still friendly for home buyers...

Conforming Conventional 30Yr Fixed  5.625%

Conforming Conventional 15Yr Fixed  5.125%

Conforming Conventional 5/1 ARM 4.750%

Conforming Conventional 5/1 IO ARM 4.875%

Jumbo 5/1 Arm  5.625%

Jumbo 30Yr Fixed 6.625%

FHA 30Yr Fixed 5.625%

FHA 5/1 ARM 4.750%

* Above Conventional rate quotes are as of 6/16/09 on a Conventional $250,000 loan amount, primary residence at 80% loan to value, with a 720 FICO score.  APR includes $1,200 in lender fees and 980 in title charges (title charges may vary).  FHA Quote assumes a $150,000 loan amount and a 680 FICO score, and a 96.5% LTV. Jumbo quote assumes a 75% LTV and 680 FICO score.   Documentation of income and assets required.  No origination or discount points.

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