Those Who Wait Will Pay Thousands More This Spring!

Here's why:

1. The deadline for the Home Buyer Tax Credit is April 30th, 2010. This is $8000 for a new homebuyer and $6500 for current homebuyers moving up.
2. While rates are still at historic lows, the Federal Reserve Board has repeated in many published reports that they will not remain there forever.
3. On April 5th, the cost of required up-front mortgage insurance (UPMIP) for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with an FHA loan, with a $7000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount, so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower by the up-front and monthly.
4. Later this spring, if FHA's new regulations go into effect, "seller concessions" will more than likely be reduced from 6% to 3%. The reduction in these "seller concessions"can increase the amount of cash a buyer wil be required to pay at closing.

When you combine the lower rate with the tax credit, you see that the homebuyers stand to gain between $13,500 and $16,000 on a home in the mid $200K's price range. That is a huge incentive for homebuyers to act now, while the incentives still exist.