6500 ways to cash in for the not so first time buyers

Sellers who couldn’t sell their home in 2009 should be feeling a little  lucky.  The housing stimulus bill that Congress just passed will undoubtedly put a silver lining on some of your clouds.  The newly expanded housing stimulus offers tax incentives to all buyers provided they meet eligibility. 

A $6500 tax credit will be available to buyers who have lived in their home for five consecutive years within the past eight years.  You must have a signed valid contract by April 30, 2010 and settlement (closing) must take place before July1.  The income restriction has been expanded to singles earning up to $125,000/year and couples with a combined income not exceeding $225,000.  The cap on the purchase price is $800,000; homes sold at even a dollar above will not be eligible. 

I am not sure this will have a huge impact on the $800,000 housing market.  Most buyers in this price range will not be swayed by less than one percent incentive.  The luxury home market faired a bit better in 2009 as people with cash stores took advantage of discounted properties.  I expect the mid range $300,000 to $600,000 sellers will benefit from this program through spring.  This offer will surely be beneficial to buyers as well as sellers who have had to sit on the sidelines waiting for a better market.  More importantly, we can remian optimistic that this may provide relief for sellers who are trying to avoid foreclosure.

$8000 home buyer tax credit extended and expanded

Not just for the first time home buyer anymore!  The oh so popular $8000 first time buyer tax credit will be extended and expanded officially at any moment.  Congress has passed a bill to extend the original Dec 1, 2009 deadline to include buyers who are under contract by April 30th and closed no later than end of June 2010.  This is great news for first time buyers who just couldn’t get it together or find the right home by now.

The bill will also allow all buyers to cash in, provided they have been in their home for at least five years and they are purchasing a primary residence.  Even more exciting is that the income limit has been increased from $75,000 annual salary for singles and $150,000 for couples.  The new income limit is $125,000 for singles and $225,000 for couples. 

The new policy will be official as soon as Obama signs the bill and shortly after the official website should be updated with the details.  www.federalhousingtaxcredit.com  Lawmakers are hoping that the extension will get the real estate industry through the difficult winter months and jumpstart the spring market while being short enough to be fiscally responsible.

$8000 tax credit making a comeback in 2010?

It is looking more likely that congress will extend the first time buyer tax credit into next year.  However, nothing official has been announced yet.  There is a huge push to get the bill passed for another year and also to expand the bill to offer incentives to other buyers.  A bill being considered will give a $6500 credit to second time home buyers.  I have read in several articles that the Obama camp is in favor of extending the program that has helped to spur on a still sputtering housing market.

It is great news, but it is not too late to take the sure thing.  You still have time to close if you are approved and your seller is willing.  If you are trying to close before the current credit expires, you better git goin!

Capitalism, a love story offers hope for struggling homeowners

Foreclosure, short sales and pre-foreclosure: a sad story that has become a real life tragedy for so many.  In the triangle, our statistics show relatively low numbers, primarily because our housing prices remain stable with a small number of “upside down” sellers.  I saw the new Michael Moore movie, “Capitalism, a love story” last night and I am recommending it for every American but especially for homeowners who are struggling to make their mortgage payments.

The movie has the typical Michael Moore flavor, pitting big business against the struggling working class.  But, it contains some shocking revelations about the wealth in our country.  Moore brings some enlightening journalism to the screen with conversations with congresswomen who advise homeowners to  ”stay in your home if you are being foreclosed” and a statement that 1% of the US population now owns 95% of the wealth.

Moore’s message is a call for democracy in US government.  Much of the film points the finger at predatory lending practices, big banks and Wall Street’s connection to top level government driven by the greed that he says is the cause for the condition of the economy.  Moore manages to blend in quite a bit of humor and make a very serious message quite entertaining.

2009 Could be the best year ever to buy a home

In my opinion, this is about as good as it will get for buyers.  If you are a first time buyer, the clock is ticking on the tax credit of $7500 that you will benefit from if you close by June 30th.  Note, the word close.  That means that you need to be under contract sometime in April to allow for unexpected delays. 

It is expected that interest rates will linger in and around 4.5%; a historic low.  I am a big fan of owning your home but with this interest rate out there, it is a good time to pay off other debts and put down a smaller down payment.  Buyers should also consider fifteen year terms instead of the more common 30.  Even if you don’t anticipate living in your home for more than a few years, you will pay down much more of the principle on a fifteen year note, increasing your equity value.

Consider adding green features.  There are great tax incentives for everything from a new, energy efficient furnace to solar panels.  These tax credits in some cases are so generous that when you factor in the energy savings, you will essentially get the improvements for free.  Keep in  mind, you will be putting the money out up front with a payback over time.  Adding green features and energy efficiency will also increase the value of your property. When you see that home that has the twenty year old HVAC, think opportunity.  Negotiate with the seller and take advantage of the creative ways to upgrade.

Lastly, there are special mortgage products that will allow you to finance improvements for home rehab or for addition of green features.  For the first time in a while, there is plenty of inventory property.

It is just my opinion, but I believe 2009 may be the best year ever to buy a home.  If you would like information on any of these programs or details on the tax credits, please contact me at 919-357-6064.

Rehabilitating a home with a new loan product

Buying a fixer has never been more affordable.  If you are considering a home purchase and want a place that you can put your own signature on, you are in luck.  There is a new loan product that will allow you to finance up to $35,000 in rehabiliation improvements.  The great thing about this mortgage is the cost of repairs can be part of the original mortgage package.  You will have one payment, one interest rate and one set of terms.  You can avoid the closing costs of a home equity loan and the higher interest rates by applying for this type of loan on the home purchase.  There are plenty of properties ripe for rehab in the triangle.  Just be sure to buy in a good location and don’t over improve for the area.  For additional info on this loan program, please give me a call.  919-357-6064.

Short sale may bring tax liablilities for the seller

Sellers who are upside down on their mortgage (mortgage balance exceeds the equity) can consider requesting a short sale from their lender.  If the lender approves, they accept less than the actual amount owed and the seller avoids foreclosure.  The buyer usually gets a good value.  Sellers should consult an accountant or tax attorney to be sure they understand their liabilities.  The IRS may consider this “forgiveness” as income and tax may be due when you do your annual tax return.  Buyers should know that short sales are more complicated and may take longer and have added risks that could be deal breakers.  If you are considering requesting a short sale, contact me for a no charge total market overview of your property (919) 357-6064

Top 10 credit dos and dont’s

It is important to keep your credit stable and keep your score high during the home buying process.  The lender will verify your credit worthiness just before closing and it is best to avoid any surprises.  Here is a helpful list to keep your credit score at optimum:

1) Don’t apply for new credit of any kind
2) Don’t pay off collections or charge offs
3) Don’t close credit card accounts
4) Don’t max out or overcharge any credit accounts
5) Don’t consolidate your debot onto 1 or 2 cards
6) Don’t do anything that will cause a red flag to be raised by the scoring system
7) Do join a credit watch program
Do stay  current on existing accounts
9) Do continue to use your credit as normal
10) Do call your lender if you receive something in the mail that you believe may affect your score

If you have any questions about these recommendations or want to receive a more detailed report on this winning strategy, please contact me at 919-357-6064.

What will the Emergency Economic Stablilization Act mean to the triangle market?

Emergency Economic Stabilization Act….that is a scary title.  This name was obviously not chosen by a corporate consultant.  There is no positive spin on that.  I have zero expertise when it comes to economics and government but  I read an excellent article about the program that put it in plain language and helped me to grasp the concept.  The plan will make more money available for lending but the money will only go to truely qualified buyers.  The financial crisis we are in now was caused by unqualified buyers being approved for mortgages.  If you are a buyer who has a stable income, good credit and a down payment, you are in a position of strength that has not been seen in the market in quite some time.  Read the article at: http://narblog1.realtors.org/mvtype/speakingofrealestate/

Foreclosures in your neighborhood could affect your home value

Do you know if your neighbors are current on their mortgage payment?  The ever increasing number of foreclosures is beginning to affect home values.  As the numbers of foreclosed properties increases, appraisers are beginning to use those sales as comparables for estimating home values.  Some markets experienced up to 30% of home sales (in specific price ranges) as foreclosed properties in 08.  Fortunately, in the triangle, we are not seeing a large number of distressed properties or foreclosures.