| Mortgage Interest Rates* |
| Rates as of Thursday, 12th March, 2009: |
| |
Conforming |
APR |
Payment per
$1,000 |
Jumbo |
APR |
Payment per
$1,000 |
| 30 Year Fixed Conventional |
4.75% |
4.916% |
$5.22 |
5.125% |
5.301% |
$5.44 |
| 30 Year Fixed FHA |
5% |
5.169% |
$5.37 |
5.75% |
5.933% |
$5.84 |
|
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| *Rates are subject to change due to market fluctuations and borrower's eligibility. |
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We sent out this information regarding the NEW $8,000 tax credit for First Time Homebuyers a couple of weeks ago and have fielded many questions so we are sending it again. To clarify dates see below:
OLD- Homes Purchased between 1/1/2008 and 12/31/2008 are eligible for the $7,500 tax credit which is essentially a interest free loan that has to be repaid over 15 years.
NEW- Homes Purchased between 1/1/2009 and 12/1/2009 are eligible for the $8,000 tax credit which is outlined below.
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
Homes that Qualify
The tax credit is applicable to any home that will be used as a principal residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principal residence also qualify.
Higher Loan Amounts
More good news - there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
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