Keller Williams Realty - Loveland Colorado

In real estate news, the tax credit has been overwhelming the top headlines. Recently, the credit ended. The deadline for under contract was the end of April 2010 and the closing deadline ended at the end of June. Congress has been working on getting this extension approved. There is still a good chance that the extension for closing will happen.

The thing is – we don’t need it. Here’s why: interest rates have been climbing down since the credit ended. Not only have they come down, they’ve come down far enough to offset loan payments and capital enough to cover the $8,000 that the tax credit offered.

When the credit ended in April, the interest on a 30 year fixed rate loan was 5.125% APR. As of July 19th, it is 4.375% APR. Given a home with a price of $180,000 and the owner holding the property for 7 years, $6,048 will be saved over that time and $2,186 more will be put towards the principal.

So the owner will be paying less each month and more of each payment will be going towards the principal of the real estate loan. The total is $8,234. This is actually more than the tax credit and it doesn’t hurt our national debt!

Special thanks to Jennifer Higgerson and Ed Hermsen