The “stimulus bill” legislation only applies to first-time homebuyers, however.  In the strict definition of “first time,” the purchaser and the purchaser’s spouse may not have owned a principal residence in the three years prior to purchasing this real estate in Denver. 

Buyers must purchase these Denver homes for their primary residences.  The good news is that any type of primary residence qualifies, including single-family homes, condominiums, co-ops, and townhouses.  Another perk inserted into the legislation allows purchasers to utilize revenue bond financing. 

Purchasers may reduce or eliminate income tax liability for the year of the purchase.  The qualified homeowner may receive as much as $8,000 as a tax credit.  Any unused amount of tax credit will be refunded to purchaser after the tax return is filed.  And these monies do not have to be repaid.  However, if the home is sold within three years of purchase, the entire amount of the credit will be recaptured by the government upon the sale of the property.

Income limits will restrict some first-time homebuyers.  Individuals with an adjusted gross income of no more than $75,000, or $150,000 on a joint return, can access the full amount of the credit.  The benefits phase out above caps at $95,000 for a single filer, and $170,000 for a joint return.

The legislation benefits will be applied to purchases retroactive to January 1, 2009 and continuing to December 1, 2009.

For more information about farms, horse properties, and real estate in the greater metro area, call Michael Paul of Realty Oasis at (303) 268-6052.

Lori Richardson, Vice President of Cherry Creek Mortgage Company in Greenwood Village Colorado reveals why.  Her e-bulletin dated February 4, 2009 explains that the Fed is buying FNMA 30-year 5.5 percent and 5.0 percent bonds.  These bonds represent outstanding mortgages with rates of 6.0 percent to 6.5 percent.  These loans are being refinanced at today’s low interest rates.  The Fed says they can continue this throughout June 2009.

Richardson goes on to say that many pools of the FMNA 5.5-percent pools will be refinanced and paid in full, giving the Fed an immediate return on investment.  Now the catch.  After the initial influx of cash from the refinanced loans, the wheels may slow down to school zone speeds.  Money will then go back to trickling in from the loans originated at today’s low rates.

That is because the monthly payments on the low-interest-rate mortgage products that are currently being used to refinance are a far cry from the large sums of money going to the Fed when the higher-interest-rate Mortgage Backed Securities are being paid in full right now by homeowners who are refinancing.

The question becomes, what will they do then?  Most likely, interest rates will start edging back up. 

And how does that affect buyers?  Richardson suggests that after the initial money flow slows down, “rates could turn higher and this window of opportunity could pass them by entirely.”  That is the reason she warns, “If you snooze, you may lose.”  Waiting for possible lower interest rates to come along could cost hundreds or thousands of dollars in monthly payments.

For more information about farms, horse properties, and real estate in the greater metro area, call Michael Paul of Realty Oasis at (303) 268-6052.