Housing and Economic Recovery Act of 2008...How can you benefit from it in Real Estate?

This new law was signed by President Bush on July 30^th. It contains critical factors that affect current home owners and those that plan to purchase a new home soon. I’ve highlighted a couple of these factors below.

 

1) Starting January 1, 2009, the new conforming loan limit in high cost areas will be $625,500 vs. the current limit of $729,750.

 

Refinance or Buy today! If you have or will need a loan amount > $625,500 after January 1, 2009 you could be in for a interest rate shock north of 10%.  Jumbo (> $729,750) 30-year fixed loans are at 9% today. Waiting could cost you about $450 per month more per $100,000 of loan amount compared to what you can refinance or buy into today (about 6.5%).

 

2) First-time home buyers, who have not owned a home within 3 years, can receive a tax credit of the purchase price not to exceed $7,500.

 

3) Down payment assistance programs like Nehemiah programs which credit the buyer 3% in closing costs and up to 3% of the down payment expire September 30^th.

If you don’t have enough money for the down payment and the closing costs, you need to into escrow on a home in the next 2 weeks or less.

 

4) The Minimum down payment for FHA loans will increase from 3% to 3.5% after December 31, 2008

If you won’t have a down payment of more than 3.5% after December 31, 2008, then prepare to buy a home before the new change goes into effect.

 

 

Please call or email us if you have any questions or want to discuss your options.