The Tax Credit passed by congress have given home buyers a better incentive to go out and make a purchase of their first home. But are they stimulated enough to do that? I believe the problem we have is not simply the apathy of the home buyer but rather the confidence level of the average buyer, any buyer of any product.
What I encounter in my small town in San Leandro, California must be typical of the rest of the country. The people I talk to are average Jane's and Joe's who if not unemployed, at this time are simply glad to have a job. We need to seek help for other areas of the economy, so as to restore the confidence that the home buyer has to have in order to sign the dotted line that promises to make payments for the next 30 years. Nobody would even think of doing that not knowing weather they will have a job next week or not. Downsizing, cut backs, pay freezes and lay offs are some of the key words that put fear into the heart of the would be home buyer.
The Recovery Stimulus Package does have very specific time limits that I as a Realtor would like everyone to know... before is too late! The deadline for this credit is December 1, 2009 and you must stay in the house for a minimum of 3 years before selling it in order to avoid having to pay that money back. There are also income limitations to qualify for this tax break; a $75,000 for single tax payers and $150,000 for married couples.
There are other benefits associated with the new Rescue Package: The new FHA and Conforming loan limits gets restored to the $729,760 maximum they had in 2008. This will help finance higher cost homes particularly in areas where the market is higher than the national average. The side effect of this increase is the possibility of refinancing for troubled home owners facing foreclosure.
And lastly, there is also a proviso for increasing up to $625,500 for FHA backed Reverse Mortgages in the Stimulus Package. This will allow seniors to acquire a replacement property without having to sell their primary residence first. Putting it all together, there is help for first time buyers, increase in limits and availability of FHA loans for middle to higher price ranges plus help for seniors who qualify for a higher FHA Reverse Mortgages to downsize. I would strongly suggest anyone reading this post to check with your CPA or attorney to verify this information.
Antonio & Alexia Cardenas, "The Realtors In Motion" can be reached at (510) 326-4263 www.ListedbyAntonio.com Serving the County of Alameda in the heart of the San Francisco bay area, especially the cities of Castro Valley, San Leandro, San Lorenzo, Hayward, Oakland, Pleasanton & Dublin