2010 Homebuyer Tax Credit is extended until September 30th

The extension of the 2010 first time home buyer tax credit has been a very popular topic over the last several days.  Both the $8000 and $6500 first time home buyer tax credit will be extended through September 30th, 2010 for those who were under contract by April 30th, 2010.  That’s the catch.  It does nto apply to new contracts.

It is very important to understand that borrowers must have been under contract by April 30th, 2010 to have any chance of receiving the first time or move up home buyer tax credit.  It was scheduled to expire on June 30th for those who had not closed but that was bumped back to September 30th.  Since the extention does not apply to new contract you will expect to see some decrease in purchase activity as there is no longer a rush to buy a home.  For those that were under contract and facing the loss of the credit, this is good news.

This extension of the first time home buyer tax credit should help many Americans save a significant amount of money.  Most purchasers will have the opportunity to finish the closing by September 30th, 2010; if they cannot they will miss out on the tax credit.  Many borrowers were facing delays caused by lenders underwriting requirements or other delays that threatened the loss of the credit. 

With mortgage interest rates still very low and a tax credit available one would think that home sales would be improving but they are not.  It is important to realize that new home buyers are not going to receive this tax credit because they were not under contract by April 30th, 2010.