RI Real Estate - Wait for the Government to extend tax credit???

I wouldn't bet on it. And even if they do, interest rates will be much higher very soon.

The Fed announced that they will be scaling back the purchases of mortgage backed securities. This program by the Fed has artificially kept mortgage rates low by providing a funding source for the resale of mortgages.

When the Fed starts to back out of the purchasing, there is no assurance that the private market will jump in. In this instance, real rates will rise to create the demand for these products on the secondary market.

What does this mean? If you can now lock in at 5% and take advantage of the tax credit - do it. Even if the tax credit is extended you could be losing money! For if real mortgage rates rise by 1%, you've lost 10% of borrowing power. So if you qualify for a $200,000 mortgage today, you would only qualify for $180,000 tomorrow.

He who hesitates is lost.