Great News for Martha's Vineyard Home Buyers!

First-Time Home Buyer Tax Credit

President Obama signed the Homebuyer Tax Credit into law after overwhelming votes for it in Congress. The credit takes effect as of November 6, 2009. To be eligible, a purchase contract must be signed by April 30, 2010, and close on or before June 30, 2010. This is a very narrow window of opportunity so pay attention and don't miss out.

Not only is the existing $8,000 tax credit for first-time homebuyers extended but a new "Homebuyer Tax Credit" of up to $6,500 for some existing homeowners has been added. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years.

The qualifying income limits are being raised to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000.

Martha’s Vineyard Land Bank “M” Exemption

In an effort to stimulate home sales to first-time home buyers, the Martha’s Vineyard Land Bank has increased the credit amount of the “M” Exemption. The “M” Exemption is a credit given only to eligible first-time home buyers toward the Land Bank Fee of 2% of the purchase price of real estate on Martha’s Vineyard.

Prior to September 1, 2004, the “M” exemption was $100,000 and in order to qualify all parties on the deed may not have ever owned real property at any time, not just on Martha’s Vineyard but anywhere. Subsequently, it was increased to $300,000 and the exemption was available to first-time purchasers of real estate who will domicile on the property within two years and hold the property for at least five years from the date of transfer. In the case of spouses, either spouse can have owned or possessed an interest in real property prior to the time of purchase, but not both spouses. As of October 27, 2009, per a recent amendment to the land bank law, first time purchasers may now claim a $400,000 "M" exemption. All of the other requirements of the "M" exemption are unchanged.

Mortgage Interest Rates Remain Below 5%

Although inflation is an assumed and anticipated part of our future economic recovery, the Fed anticipating continued slow growth during the next few months voted the status quo for interest rates with their announcement this week that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." Rates will stay where they are for now because the Federal Reserve group believes that even with economic growth ahead, it will be at a manageable pace.

On Martha’s Vineyard, for loans up to $417,000 you can get a 15-year fixed rate mortgage for 4.5%, with no points and a 30-year fixed with one point for 5.1%. 30-year loans are actually down by an eighth of a point at maturity.