No doubt the $8,000 tax credit was a welcome benefit for homebuyers who signed contracts to purchase before the tax credit ended on April 30, 2010.
But, if you look at the drop in interest rate between then and now (April 30 vs. September 30, 2010), there may be reason to celebrate… and to purchase NOW!
As of April 30th, a 30 year fixed rate mortgage was pegged at 4-3/4%. Today, by comparison, the rate for the same loan is 4-1/8%. On a $250,000 loan that difference equates to a monthly savings (principle and interest) of $92.50. That’s an annual cash savings of $1,110 per year.
Depending upon how long you own that next home, the savings can continue for years to come and quickly exceed the tax credit amount.
In addition, some sellers, recognizing that a buyer for their home was eligible for the widely publicized tax credit, may have been less negotiable on price. With the tax credit gone, today’s buyer may also be able to negotiate a lower price, further adding to the benefit of buying NOW rather than before.
Market conditions vary by location and seller motivation can vary widely from property to property. Interest rates are at their 40 year all time low! An experienced Realtor can help you identify and fully evaluate the opportunities available in your area.
Jack Strama
Atlanta Fine Homes Sotheby’s International Realty
direct: 770.656.1095
office: 404.835.9600