Let's Blog About It

It is finally official.  The homebuyers' tax credit has been extended to April 30, 2010.

President Barack Obama approved the extension as part of a $24 billion economic stimulus bill signed Friday.  The bill also includes an extension of unemployment benefits to the longtime jobless and tax credits for some businesses.

The housing tax credit portion of the bill extends the $8,000 tax credit for home buyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to other homeowners who have lived in their current home for at least five years and are seeking to relocate. 

Another modification to the original legislation raises the income limits for program participation from $75,000 for a single purchaser to $125,000 and from $125,000 to $225,000 for a couple.  There are also credits available on a diminishing basis above those income limits.

The bill was passed by the Senate on Wednesday evening and by the House on Thursday.  Both bodies acted in a bipartisan manner which has seldom been seen this year.  The Senate passage was unanimous; the House voted 403 to 12 for the bill.

Housing interests as well as the Obama Administration had lobbied heavily for the extension.  In a statement released after the House passage of the legislation, Mortgage Bankers Association Chairman Robert E. Story, Jr., said, "At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the homebuyer tax credit is a critical step to keeping the momentum.  This has been one of MBA's top single family legislative priorities, and we are very glad to see that policymakers on both sides of the aisle see the importance of this measure.

"The existing credit for first-time homebuyers has helped move a segment of potential homebuyers off the sidelines and into their first homes.  By expanding it to qualified existing homeowners, we can help stimulate even more home purchases for qualified buyers.  I also want to applaud measures in the bill that will help eliminate fraudulent use of the tax credit."    

The Associated Press quoted Rep. Shelley Berkley that the bill "will allow more people to purchase a home in my district and help stop the continued downward spiral in housing prices caused by the foreclosure crisis."  Shelly represents Nevada, a state that has been particularly hard-hit by the housing collapse.

Critics of the bill have said that it is merely accelerating purchases that would have occurred anyway and creating yet another artificial housing bubble.

Mortgage News Daily Managing Editor Adam Quinones said, "It is likely that the prior tax credit's Nov.30 expiration has already stolen a portion of housing demand from 2010. On a broader scale, the extent to which the tax credit extension adds new demand is a function of buyer's perception of home prices, liquidity in the secondary mortgage market, and the health of the labor market. Overall, while the home buyer tax credit extension is a net positive for the industry, there are still several structural ineffficiences that must be addressed before housing can gain recovery momentum".

In signing the bill President Obama stressed that the measure is revenue neutral and will not increase the deficit.

Well today I received about 4 rate increases.  I expect to see more of the same tomorrow. 

April's Goods & Services Trade Balance Report will come out 8:30am.  This report gives us the size of the U.S. trade deficit.  This isn't likely to cause much movement in rates, but Wednesday afternoon the Federal Reserve will release its Beige Book.  The Beige Book details economic conditions throughout the U.S. by region.  The Federal Reserve relys on this data heavily during FOMC meetings to determine monetary policy.  If this data shows a softer economy then we may see mortgage rates dip by 11:00am.  Conversely if the data shows signs of inflation growing that mortgage rates could rise even higher.

Rates are on the rise and here is why;

Last week higher than expected unemployment rates came out which is great news for the bond market and mortgage rates. 

However job losses last month were down.  It was expected that the number of job losses would be somewhere around 500,000.  Instead they were around 300,000.  Although this is bad for mortgage rates and is causing them to rise, this could ultimately be a good indicator that we may be pulling out of the recession.

We'll still have to wait to see what happens this week with GM and Chrysler with respect to job losses to see where the rates are going to be this coming week.

If you're considering refinancing or purchasing now would be a great time.  If there are more positive signs that we are coming out of the recession than mortgage rates will continue to rise and you may miss your opportunity of having a low fixed rate loan in the 5's.

Three weeks ago you could get a 30 year fixed rate loan at 4.75% interest with no prepayment penalty.  Today that same loan is at 5.5%.  Rates could still dip below 5%.  The key to getting the best rate is to submit your application for a refinance now.  Don't wait for the rates to drop or you will be too late.  Apply now and float until the rate you want becomes available. 

Rates are at a 37 year low.  If you are saving money by refinancing at 5.5% then apply and lock your interest rate today!  Don't gamble with your savings and your future.

Be ready for the biggest shopping day of the year.  The day after Thanksgiving is Black Friday.  This is the time to be buying electronics and big ticket items.

Here are some tips to find the best deals;

• Check your email for special deals and coupon codes
• Sign up to receive email notifications from your favorite retailer
• Google - Amazon Coupon Codes for additional coupons

Best coupon providers because they don't have expired coupons are;

• www.retailmenot.com
• www.bradsdeals.com

It appears that there are a number of sites just focused on Black Friday Sales.  Try the following sites and let me know which one you prefer and why;

• http://bfads.net/
• www.blackfriday.fm/
• www.blackfriday.info/
• www.black-friday.net/

If you Google Black Friday 2008 you will see a number of sites.  I just listed the first 4 that came up.

Furthermore, if you are buying electronics and have questions about a possible item you can call CNET at 888-900-CNET and get their advice.  You can also send them an email at holidaywebcam@cnet.com.  They will be taking calls and responding to emails on Black Friday from 8:00am to 6:00pm.

Good luck and be safe.

Please let us know if you found this post useful by commenting.

Thank you.

With the economy the way it is I thought that it would be beneficial to know where you could buy the cheapest gas in Reno.  So I have listed the top three;

1.  Go Mart - 1755 Sutro St. & Oddie @ $1.94 a gal.

2.  Costco - 2200 Harvard Way @ $1.95 a gal.

3.  Sam's Club - 4835A Kietzke Lane @ $1.95 a gal.

Information provided by www.gasbuddy.com.  Please go here to see a list of gas stations and locations in the area.

Did you know that the current minimum down payment for a buyer using FHA financing is 3%?  Did you also know that loans originated after January 1, 2009 will require a minimum down payment of 3.5%?  Yes, it's true.  Find your home and get your financing now and save yourself that extra .5%.

Currently FHA is the only program in our declinging market that allows for 97% financing and after January 1, 2009 the max will be 96.5%.

The maximum financing allowed on conventional conforming is now 92%.  Mortgage Insurance companies guidelines are changing frequently and 92% could become 90% or even 85% in no time. 

Don't wait for rates to come down or for that home to be $5k to $10k less.  Get it know before the program you need is eliminated.

With all of the negativity in the news and the marketplace, I have decided to dedicate "Oh My Blog" to positive news and information.

If you have any questions or opinions, positive or negative, please feel free to post them here.

Best Regards,

Deanne M. Powell