Rumors are going around about the following ideas, supposedly on the table for legislative discussion:
First Time Buyer Tax Credit Change:
Currently, the credit is up to $7500 for qualified first time buyers, and the funds are expected to be repaid at the rate of $500 per year for the ensuing 15 years.
Proposed changes are for increasing the credit to $14,000, and also to make it forgivable. In other words, no requirement to be repaid. Ever.
That is a significant change, and would represent a MAJOR incentive to enter the market.
Conforming Loan Limits:
Currently, the limit is 417k nationally, and in some high cost areas, it can be as high as 625,500. All 9 Bay Area counties are currently at 625,500. During 2008, the ceiling was higher – 729,750, but the “temporary” classification caused the lenders, who still operate in a free market world, to have almost zero interest. It didn’t really work. The 625,500 level was more conservative, but permanent. It has helped, but not quite as well as intended.
Proposed changes would reinstate the ceiling at 729,750 for qualified California property, or, according to one source, raise the ceiling to ~$932,000 for qualified California property.
Also potentially significant change, unlocking many borrowers with high outstanding loan balances on expensive property. No way of knowing if lenders will have an appetite for these deals or not, but it’s something to keep an eye on…
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About Me
- john
- As a Certified Mortgage Planning Specialist (CMPS) with extensive experience in the mortgage industry, I specialize in helping my clients find, structure and manage mortgage debt as one piece of a larger financial strategy. I provide my clients with detailed home loan and debt structuring guidance that compliments their long term financial objectives, including college savings, retirement planning and other investment goals. With an understanding of financial planning concepts that relate to taxation, investment strategy, and estate planning, I work to create a personal strategic mortgage solution for my clients’ diverse financial needs. I collaborate with advisors in other financial fields, and introduce other specialists for guidance as needed. The ability to assess and advise on all aspects of a client’s financial situation can minimize financing costs and tax exposure while building net worth – a benefit often missed when focusing on home loans exclusively.