The US Senate and House of Representatives have both voted to extend the deadline for closing on houses bought by April 30 from June 30 to September 30 in the hopes of allowing around 180,000 home buyers to complete their transactions and still qualify for the tax credit. While this does not extend the period in which home buyers could qualify for the credit itself, it does mean that people who began the deal process to buy a home by the end of April will be able to receive the credit despite not completing the deal by the due date of June 30, which is what many home buyers are facing due to the delay in mortgage processing that has resulted from the popularity of the tax credit.
The extended-deadline amendment to HR 4213, the "American Jobs and Closing Tax Loopholes Act of 2010," was added onto an amendment that also extended unemployment benefits. It just barely passed before the June 30 deadline, and was written so that there will be no gap between June 30 and when it was signed by the President in early July. Home buyers will still have to show all the evidence that they entered a contract before April 30.
So what does this mean? The newly-passed amendment eases the stress of thousands of NJ home buyers. The credit has proven to be extremely popular, which has been great for home sales, but has also led to backups in the normal time it takes to qualify for a mortgage. In addition, many first-time buyers are buying homes in foreclosure or short sale and the additional paperwork is adding to the logjam. Those of you waiting for your mortgage to clear, there is at least the bright side of amazing rates to look forward to, the best recorded by Freddie Mac since 1971, when it started following interest rates. The average annual rate for a 30-year fixed-rate mortgage (20% down) is now 4.69%. Just a year ago the rate was 5.42%. Though the low rates are a sign of the shaky economy, they are a positive for those looking to buy homes or refinance existing mortgages. No wonder mortgage brokers are swamped!