Three important dates to discuss with your prospects today.

Here are three upcoming dates I've been talking about with all of my clients and referral partners for the past month.

1. March 31 - Fed purchase program of Mortgage Backed Securities ends. While none of us has a crystal ball for what long term interest rates do, I anticipate rates to rise back to Fall 2008 levels (about 1% higher than today) soon after this date. As we talked about a couple of weeks ago, this will not only raise the total costs of financing over the long term, but in the short term it will negatively impact the amount buyers will qualify for.
2. April 6 - HUD raises upfront mortgage insurance premiums on FHA loans from 1.75% of loan amount to 2.25% ( $965 increase on $200K purchase w/minimum 3.5% down)*
3. April 30 - Last day to contract in order to qualify for first time homebuyer tax credit (as well as the "move up" credit which I haven't seen much of) June 30 is the last day to close these. I've had several people ask if I think they'll extend these again, I honestly don't see how they can with the size of our current deficit.

The overall bottom line here is the cost of borrowing money for home financing is going up and the extra incentives are going away in the 2nd quarter of 2010. I think this will be yet another game-changer for a lot of us. Anyone we help between now and then we'll be saving a bundle. Obviously this is a great conversation to have with any buyers currently in the market, but also any of your prospects who have been sitting on the fence;-)  

*HUD is also seeking to increase the annual premiums (which is the amount borrowers pay monthly) and reduce the allowable seller concessions from 6% to 3% on FHA loans, but both of these require legislation in order to implement. I think both are likely to pass, but it's anyone's guess when we'll see them take effect. Regardless, they will further impact the costs to homebuyers, so I believe it's beneficial for everyone to be aware of these proposals and start talking about them now.

Hope that you're able to start working these into your conversations today. Please let me know if you have any success stories after doing so!