While the proposed $15,000 home-buyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Barack Obama signed into law Tuesday includes a similar--albeit smaller--measure designed to help revive the real estate market. Here are six things you need to know about the freshly-enacted $8,000 first-time home buyer tax credit.

1. Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.

2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.

3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.

4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.

5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.

6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

If you're thinking "Should I refinance my house?", check out the 6 reasons as to why you may take such a decision.

• You want to save more:
  Your monthly payments will be reduced if you get a low rate or when your loan term is extended. However, with an extended term, your monthly savings will increase but you'll be paying more in total interest for the life of the loan.


• You want to pay down your mortgage quickly:
  You can shorten the length of your mortgage by reducing the loan term. Monthly payments will no doubt go up, but you will be able to save more in the overall interest payment. Moreover, you'll be debt free in a shorter time.


• You need extra cash to pay off credit cards:
  If you have enough home equity, you can borrow more than the current loan balance. With the extra cash, you can pay off high interest debts such as credit card balances or installment loans. You gain out of it as the interest on such debt is not deductible unlike mortgage interest.


• You wish to consolidate 2 loans into one:
  If there's enough equity (due to high appreciation), you can consolidate first and 2nd mortgages and refinance into a single first mortgage. The monthly payment on the new loan is likely to be lower than the combined payments on the first loan and the second mortgage.


• You want to convert an ARM into FRM:
  This allows you to lock in at a low rate. You can thus repay the loan with stable monthly payments rather than variable payments over the loan term.


• You want to get rid off PMI:
  If your current loan balance is below 80% of the new appraised home value, you can go for a home refinance and stop paying the PMI.

If you're thinking "Should I refinance my house?", check out the 6 reasons as to why you may take such a decision.

• You want to save more:
  Your monthly payments will be reduced if you get a low rate or when your loan term is extended. However, with an extended term, your monthly savings will increase but you'll be paying more in total interest for the life of the loan.


• You want to pay down your mortgage quickly:
  You can shorten the length of your mortgage by reducing the loan term. Monthly payments will no doubt go up, but you will be able to save more in the overall interest payment. Moreover, you'll be debt free in a shorter time.


• You need extra cash to pay off credit cards:
  If you have enough home equity, you can borrow more than the current loan balance. With the extra cash, you can pay off high interest debts such as credit card balances or installment loans. You gain out of it as the interest on such debt is not deductible unlike mortgage interest.


• You wish to consolidate 2 loans into one:
  If there's enough equity (due to high appreciation), you can consolidate first and 2nd mortgages and refinance into a single first mortgage. The monthly payment on the new loan is likely to be lower than the combined payments on the first loan and the second mortgage.


• You want to convert an ARM into FRM:
  This allows you to lock in at a low rate. You can thus repay the loan with stable monthly payments rather than variable payments over the loan term.


• You want to get rid off PMI:
  If your current loan balance is below 80% of the new appraised home value, you can go for a home refinance and stop paying the PMI.

Baytree Lending Company is a wholly owned subsidiary of Baytree National Bank and Trust Company, a privately held bank, located in Lake Forest, Illinois. Baytree Lending Company has been in business since January of 2000 and operates as a retail mortgage banker that specializes in matching the appropriate mortgage loan programs to our wide ranging customer base. As a subsidiary of a federally chartered banking institution we're able to provide mortgage options to people in all 50 United States, with varying credit backgrounds and through a seemingly limitless number of investors.

Operating through an array of mortgage loan professionals working directly in the markets they serve and with a headquarters located in West Allis, Wisconsin, Baytree Lending is committed to offering the most competitive loan programs that meet the individual needs of our customers. With a focus on providing quick, efficient, customized solutions to our customers', Baytree offers a no pressure, service oriented loan experience that redefines the process of obtaining a mortgage loan.

Baytree Lending Company offers loan programs for conforming, non-conforming and government backed products, such as FHA, to our customers. Please contact us to find out if your mortgage is the best one for your needs and see the difference you'll experience working with a banker that offers the competitiveness of a broker and the stability of a bank.

Baytree Lending Company is proud of the mortgage professionals they employ and their approach to offering individualized mortgage solutions to their customers. The company offers the most competitive conforming loan products available in the market today featuring low closing costs and attractive interest rates for purchase and refinance transactions. In addition to our conforming loan products, we're also your FHA loan specialists. Our FHA and other unique products utilize government backed programs to provide security and affordable payments.

During these volatile economic times, and the changes taking place in the mortgage marketplace, it's more important than ever to entrust your financial affairs to only those companies that have proven to conduct their business with integrity and honesty. Baytree Lending Company is proud of its reputation and ethical approach to offering quality products and customer service. Armed with a variety of loan programs, we can assist our customers regardless of their credit or circumstances. Baytree Lending Company is pleased to be the only call you need to make to meet your mortgage needs.

Recent actions by government agencies and others have resulted in mortgage rates inching down toward all time lows. Combined with an increasingly stable real estate market, we find ourselves in a promising time, whether you're refinancing or purchasing the home of your dreams.