Yes, They Extented the $8.000 Tax Credit - "But Susan, Why Do You Think Interest Rates Will Rise?"

Oh, wow, the government did a wonderful and smart thing when they took the Federal Tax Credit program for first-time home buyers and not only extended it, but expanded it as well to individuals who already own a home but want to get a new one!

Now, below, I’m going to give you the details of the program. But, first, I want to alert you to what will likely happen when the program ends next year!

Believe me, when it terminates, interest rates will likely rise. And that’s not just my opinion! Many mortgage professionals think this is a likely scenario.

Why am I bringing this up? Because by buying now, you can save yourself thousands of dollars over the life of a mortgage loan! Just a 1% rise in the rate can be very expensive for you.

Let me explain with an example. For ease of calculation, let’s assume the interest rate is 5% for a $165,000 30-year fixed mortgage. The monthly payment will be $885.76. Or use this easy loan calculator.

Now, let’s raise the rate to 6% for the same mortgage. This means the monthly payment will raise to $989.20, or $103.50 more. That’s an extra $1,242 per year. Over a 30-year period, well…..that’s going to take a lot of money out of your pocket!

So, you can see why it’s important for you to… buy a new home now and get huge savings!

Okay, let’s get back to the details of the wonderful tax credit program I promised you. Here goes…

If you’re a first-time home buyer, the tax credit remains the same - $8,000.

But, as I said earlier, there’s been a wonderful change in terms of the income range. It’s been expanded as well!

The credit doesn’t begin to phase out until your modified adjusted gross income exceeds $125,000 for single filers or $225,000 for joint filers. The old phase-out thresholds were $75,000 and $125,000, respectively.

And now for even more fantastic news if you already own a home but want to buy or build a new one. The tax credit program has been expanded to cover you if you’ve lived in your current principal residences for at least five out of the last eight years.

In that case, your maximum credit will be $6,500. I know, I know, it’s lower than that of a first-time home buyer, but it’s still a substantial amount of money!

So, whether you’re a first-time home buyer or a current owner, contact me right now at 402.305.4335 or sclark@deebrealestate.com to learn more about the details of the program and those low interest rates!