First-Time Home Buyer Tax Credit Extension Vote Delayed

The Gloves come off, the battle goes on and the vote on government grants for first time home buyers tax credit gets delayed!

If you were  hoping for an approval from the U.S. Senate on the newest proposal for the extension and expansion of the first-time home buyers tax credit, you are going to have to wait until at least next week and who knows if we will have to wait any longer than that.

Although, it has been rumored, at least verbally, that an agreement has been reached and the passage into law is what many reporting on the subject say is almost a fact. Until it is passed it is only a rumor and nothing more.

In case you haven’t heard the bullet points of first time home buyer tax credit extension 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 (or 250,000.00)

3.    Evidently and this is a new one…allowing the tax 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.   Move up Tax Credit:  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

How will current home owners qualify for the home buyer tax credit?

I am very curious to see what event would have to transpire by December 1st in order to qualify for the tax credit if you are a current home owner.  If they based it on the closing date would have to be on or after December 1st, imagine what that would do to all of the purchase transactions which are already in the process now?  It would delay closings for a full month not too mention it would also create incredible chaos to the Real Estate and Mortgage industries.  Imagine all who are under contract now and who are supposed to be closing shortly,  attempting to delay or canceling their transactions all together.

Today was another great day for current mortgage rates as they crept lower throughout the day  It appears the lower rates were more to do with the stock market sliding over 200 points than anything else.

Low current mortgage rates:
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.

Check out other Total Mortgage Blog Posts for more information on the first-time home buyer tax credit.

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