So, the end result is that the tax credit did was it was designed to do, or did it? Well, kind of. The tax credit is no longer available, but interest rates have dropped, including on FHA loans which are down nearly half a point since May 1. That means buyers using an FHA loan to buy a $200,000 home will have nearly $9,000 more purchasing power.The following illustrates this point:
Using this same scenario, buyers purchasing a $400,000 home using an FHA loan have close to $18,000 more purchasing power. In other words, for the same monthly payment, today’s buyer could purchase a home worth $18,000 more than they could have on May 1, 2010.
Make sure you look at this Rent vs Own Blog that CLEARLY and HONESTLY shows that buying a home today is equally or more beneficial than buying with only a $8,000 tax credit incentive.
Who knows how long interest rates will remain this low, but for those looking to buy a home in the near future, this increase in purchase power could be their golden ticket. For specific guidelines and tips for getting even a sweeter deal while either purchasing or selling a home, reference the blog I wrote on Strategic Financing Using A Seller Interest Rate Buy Down.
Lastly, here is a good article that recently ran in the Wall Street Journal about the dip in interest rates and what it means for homebuyers and the U.S. economy: Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5%
These are a couple of very important facts and stats to present to your buyers and sellers... for more information, please contact me directly at (425) 350-7136 or dan.mortgageadvisor@gmail.com
Dedicated to Your Success,
Dan
a special thanks to Lennox Scott for providing the insight and information to this blog entry
