Posts Tagged ‘home buyer tax credit’

There’s still time

April 26, 2010

It seems many potential buyers are not aware of the “fine print” details of the current tax credits for buying homes (either as a first time home buyer OR repeat buyer). Most believe that it is too late to take advantage of the tax credit since it comes to an end this Friday (end of April). That is definitely NOT the case!

Home buyers only need to be under contract by the end of April, then they have another 60 days to complete the purchase. That means buyers still have all week to find a home and get under contract!

Bottom line – if you haven’t given it much thought, have been sitting on the fence, or unsure of what to do, don’t worry, you do still have some time. Just get under contract by the April 30th because 60 days is MORE than enough time to work with a mortgage consultant to complete the purchase.

Here today…

April 8, 2010

The deadline for the tax credit is fast approaching. If you haven’t started the process, don’t worry, there is still time!

Unlike the first go around, you do not have to be closed by the deadline – you only have to be under a binding contract by the end of April. You then have 60 days (end of June) to complete the purchase.

This is ideal for all of those fence sitters out there! ūüôā

For more details on the tax credits, check out this previous post. Some quick points:

  • First time home buyer (or not owned a home in 3+ years) tax credit of $8,000 extends through April 30, 2010. Home must be under contract by that date and closed on or before June 30, 2010.
  • A ‚Äúmoving up‚ÄĚ tax credit of $6,500 is available for current home owners buying a new primary residence.¬†¬†To qualify, home owners moving up¬†must have lived in their current residence for¬†5+ years at the date of the binding contract to buy the new home.

If you have ever thought about buying a home to earn one of the tax credits, it isn’t too late to get started. Begin by talking with a mortgage professional, then find a home.

The tax credits are here today, but won’t be for much longer.

is the (low mortgage rate) party over?

February 9, 2010

The party is just getting started in New Orleans (Super Bowl win + Mardi Gras = month long celebration), but it may soon be coming to an end for historically low rates.

Enjoy it while you can!

Mortgage rates hit historic lows in 2009 thanks to the extraordinary efforts of the Federal Reserve.  Back in November 2008, the Feds announced a program to buy mortgage backed security (MBS) bonds.  The reasons were two fold:

  • to help push mortgage rates lower to stimulate the real estate market
  • to create¬†a market (or in other words, increase the value) of MBS bonds for others to buy

When the plan was announced by the Feds in November 2008, interest rates dropped roughly a half point in one day!  As the Feds began buying bonds, rates dropped down to their historic lows. The initial plan was to buy bonds through the first six months of 2009. It was extended through 2009, and extended again through end of the first quarter 2010.

At their recent meeting, the Feds reiterated their intentions to “seamlessly exit” the MBS bond market with no hint at another extension to the MBS bond buying program.¬† The question now is “what happens to mortgage rates?”¬† Take a look at the chart below.

Since mortgage rates dropped significantly on the announcement of the plan, and then continued to improve to historic lows as the Feds purchased MBS bonds, one would logically expect the opposite reaction once the bond buying program comes to an end.  In this case, and at least to some degree, interest rates should rise.

How should you proceed? Anyone who hasn’t refinanced OR is waiting until the deadline to take advantage of one of the home buyer¬†tax credits, go ahead and get prequalified today.¬† Move forward with the loan now while rates are still ridiculously low.

There is not guarantee rates will dramatically increase, but also no guarantee they will stay the same.  Take advantage of the market and low rates while they are still available.

to buy or not to buy

February 3, 2010

That is most certainly the question these days. The answer is an easy one if you look at the market as a whole Рhome values are down, homes are more affordable than they have been in years, financing is available, and there are incentives (federal and some state tax credits). With all of that in mind, it is a good time to buy!

Specifically, if you are in one of the two categories below, there has never been a better time to buy a home.

  • First time home buyers – Conventional loans available with as little as 5% down and FHA loans only require 3.5% down.¬† The seller can pay for most (if not all) of the closing costs.¬† The down payment can be a gift from a family member.¬†The $8,000 tax credit still applies to first time home buyers (or anyone who has not owned a home in the last thee years).
  • Buyers looking to move up into a larger home – Buyers may lose money selling their current residence, but save substantially more on their next purchase. For instance,¬†I’ve had clients lose a few thousand dollars on the homes they sold only to buy new homes (that were originally listed over $400,000)¬†in the $300,000¬†price range. Also, don’t forget about the $6,500 tax incentive available to move-up or repeat home buyers.

Now is indeed a great time to buy, and if anyone is looking to take advantage of one of the tax credits, what are you waiting for?  Remember in order to claim one of the tax credits, the home must be under contract by the end of April and purchased by the end of June.

If you haven’t spoken with someone about qualifying to buy your first home OR seeing how much home you could afford prior to selling your current residence, now is the time! I would enjoy the opportunity to speak with anyone looking to take advantage of the current market and/or government tax programs.

it’s official

November 6, 2009

The new bill extending the first time home buyers tax credit passed through both the House and the Senate.¬† The last stop is President Obama’s desk.¬† Once signed, the law goes into affect.

Several aspects of the bill are the same, but there are some new twists this time around.

  • First time home buyer tax credit of $8,000 extends through April 30, 2010. Home must be under contract by that date and closed on or before June 30, 2010.
  • As before, first time home buyers are individuals who have never owned a home OR have not owned a home in 3+ years.
  • A “moving up” tax credit of $6,500 is available for current home owners buying a new home.¬†¬†To qualify, home owners moving up¬†must have lived in their current residence for¬†5+ years.
  • Income levels for a single purchaser are limited to $125,000 adjust gross income (up from $75,000) and $225,000 for couples (up from $150,000).
  • Home buyers with adjusted gross income above those levels can still qualify for the tax credit, but the amount of the credit diminishes as you move above the income limits.
  • In order to cut down on fraud, home buyers must be at least 18 years old and must submit a copy of the HUD-1 settlement statement from closing.

There you have it.¬† New life in the tax credit and let a new countdown begin… only 175 days left before you must have a home under contract to qualify for either of the tax credits.

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Seems that time is not running out

November 2, 2009

There has been a lot of talk coming out of Washington regarding extending the first time home buyer’s tax credit.¬† There are those that want it extended for another year.¬† Others that want it phased out gradually over the next year.¬† There are some who want it to end now.

After weeks of hearing about it,¬†there are actual developments to report on a possible new bill that will extend the tax credit.¬† Note the use of the word “possible” because this is not a done deal.

  • the tax credit applies to first time home buyers (never owned a home OR not owned a home in 3+ years) and could also apply to buyers moving up to a larger primary residence (must have owned current home 5+ years)
  • the first time home buyer credit would remain at $8,000 and the trade up credit would be $6,500
  • home buyers (first home or new home) adjusted gross cannot exceed $125,000 ($225,000 for couples filing¬† jointly)
  • homes must be under a signed contract by the end of April and close no later than June 30, 2010
  • tax credit only applies to homes $800,000 or less

As of this posting, the bill has not been passed and no vote is scheduled.  What does that mean? If you want to make sure you get the $8,000 tax credit as a first time home buyer, start the process now and own your home before the end of November.

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