First-time Home Buyer Tax Credit Extension Passes Senate

The First-Time Home Buyer Tax Credit Extension Bill Clears The First Hurdle
If you were waiting/hoping for an approval from the U.S Senate on the newest proposal for the extension and expansion of the current first-time home buyers tax credit, you're in luck, The Senate overwhelmingly passed the proposal 98-0 last night to extend and expand the home buyer tax credit as per below.

House of Representatives expected to pass first-time home buyer tax credit
The House of Representatives are expected to execute their version of the 2 minute no huddle offense and approve this the extension of the first-time home buyer tax credit hopefully by the end of this week.

The House of Representatives is evidently going to act quickly and approve the bill as passed by the U.S. Senate so the President can sign it into law asap. We can at least hope they will act quickly although I have a my doubts. My doubts are not associated with if this will be passed into law, just with how fast.

I still haven't heard any information whatsoever on how they plan to incorporate the eligibility of current homeowners within this bill. You would think with all of the "news leaks" someone would have this information by now.

What About Non First-Time Home Buyers?

They have to be very careful so they do not bring current purchase transactions of non-first-time home buyers or move-up buyer to a stand still while all of the future eligible buyers out there wait for clarification. I would think this part of the legislation and how it is going to be incorporated is the most vital part of the whole legislation, yet not any pre-guidance, as far as I am aware of, pertaining to this has been released. Why should a non first-time home buyer sign now if they may be better served to wait a month if it is possible to receive the evidently $6,500.00 tax credit. I have a difficult time believing, based on how much this legislation is going to cost the tax payers, that the expansion to include non first-time home buyers is going to be effective, grandfathered backwards in the past.

In case you haven't heard the bullet points of this agreement are rumored to be:

1. Extension of the current $8,000.00 tax credit for first-time home buyers with a signed purchase contract by April 30, 2010 and closed by June 30, 2010
2. Raising the income limits for singles to $125,000 and for married filing jointly to $225,000 ($250,000 I have seen both amounts reported)
3. Evidently and this is a new one...allowing the credit for higher income levels but phasing it out (In my opinion this will open up a can of worms for a prolonged debate and fuel a delayed vote)
4. Offering a $6,500 credit for current home owners who have owned their current home for 5 years. (I am not sure where the 5 years was derived from and also if for whatever reason they will allow a phasing out of the credit for higher income levels I do not understand why they wouldn't allow phasing out the credit depending on how long you have owned your home maybe making the ceiling at 2-3 years)
5. Limiting the purchase price of the home at $800,000
6. Effective December 1,2009
7. Members of the military, military intelligence, and foreign service who are on qualified extended official duty are not subject to the recapture fee and individuals who have been deployed overseas for 90 days or more in 2008 or 2009 can claim the credit through April 30, 2011.

Today is another great day for current mortgage rates so far as they are trending lower through the day It appears the lower rates were more to do with the stock market sliding over 200 points than anything else.

With current mortgage interest rates still at unbelievably low levels let's hope they pass this bill in one way, shape, form or another fairly soon so borrowers have the ability to qualify for the home they want. The higher the interest rate go up, the higher the borrowers debt to income levels will also increased therefore threatening the amount they may be able to qualify for.