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April, 2007 Newsletter

++++++++++++ April 1, 2007 +++++++++++++++++++

Introduction: Some Sales Rise, Some Fall, Prices Fall
Mortgage Rate Update: Most Rates Stable
This Month's Tip: Tax Changes for PMI (Private Mortgage Insurance)

Introduction: Some Sales Rise, Some Fall, Prices Fall

In a story that we have reported a number of times over the last year,
sales of previously owned homes rose in the month of February, but,
again, prices fell. According to the National Association of REALTORS,
sales rose 3.9% in February, 2007 over the rate in the same period last
year. Much of this increase was in the Northeast area of the U.S., where
weather was unseasonably warm at the end of 2006. This sales
increase was the biggest jump since March, 2004.

At the same time, sale prices once again fell in the month of February,
with the national median selling price at $212,800, down 1.3% from the
median price of $215,700 in February 2006.

Sales of new one-family houses in February 2007 were at a seasonally
adjusted annual rate of 848,000, according to estimates released jointly
on March 26th by the U.S. Census Bureau and the Department of Housing
and Urban Development. This is 3.9 percent (±17.4%) below the revised
January rate of 882,000 and is 18.3 percent (±12.2%) below the February
2006 estimate of 1,038,000.

The median sales price of new houses sold in February 2007 was $250,000
(this was a decrease of 0.3% from a year ago--ed.); the average sales price
was $331,000. The seasonally adjusted estimate of new houses for sale at
the end of February was 546,000. This represents a supply of 8.1 months
at the current sales rate.


Mortgage Rate Update: Most Rates Stable

Most mortgage rates were reasonably stable for the month of March.
30-year fixed rate mortgages went from an average of 6.18% for the
period that ended March 1 to an average of 6.16% for the period that
ended March 29th. This is almost exactly the same average rate,
according to mortgage company Freddie Mac, that 30-year fixed-rate
mortgages began the year in January.

15-year fixed-rate averages decreased a bit during the month,
dropping from an average of 5.92% at the onset of March to
an average of 5.86% at the end.

For current average mortgage rates, see the
rates page.

For more information on mortgages, visit the
Mortgage Section

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This Month's Tip: Tax Changes for PMI (Private Mortgage Insurance)

We've changed the subject of this month's tip to give you some hints
on possibly saving some money on your taxes. The tip entitled
"Ready, Set, Close" will appear in May's newsletter.

A little-known change in the United States tax code, passed by the
Congress at the end of the 2006 session, could mean tax savings for
many home buyers in 2007. For those that qualify, Private Mortgage
Insurance (PMI) premiums will be tax deductible for 2007 when taxes
are filed in 2008. It is important to note here, though, that there are
some qualifiers in place that could affect your deductibility, so it is
imperative that you consult with your tax professional before assuming
that the change will be applicable to your situation.

PMI is an insurance that generally comes into play when a buyer has
less than a 20% downpayment. This insurance is designed to protect
the lender should the buyer default on the loan. The amount of the
mortgage insurance premium will vary due to a number of factors including
the loan amount and the amount of downpayment accompanying the
loan. Since PMI adds a protection to lenders, it frequently allows them
to make loans that they otherwise may not be able to make.

Prior to this recent change, there was no tax deductibility avalilable for
these premiums. The new law, though, has changed this if you meet the
requirements, which include:

+ $100,000 maximum income for full deductibility
+ Incomes of $100,000 to $109,000 have a phased deductibility
+ Closing must occur in the 2007 calendar year
+ The tax code has been changed allowing this deduction only for the
current year. Congress will need to extend it to have it apply for
future years.

Determine If You Qualify

You will most likely want your lender to make comparisions for you to see
which is the most advantageous for your situation--Private Mortage Insurance
and a tax deduction or a piggy-back loan whre you will secure two loans--
one for the 80% first mortgage (so you can avoid PMI) and a second loan
for most (or sometimes all) of the 20% downpayment.

Next Month's Tip: Ready, Set, Close


The Home Buying Checklist

Many of our visitors have said that one of the most valuable
aspects of the Home Buyer's Information Center is the
Buying Checklist, where they can make sure that all
the bases have been touched.
You can find the checklist

As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a quick line

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great month and good luck in all your endeavors!

The Team at the Home Buyer's Information Center

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