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Archive for August, 2008

A few weeks back I wrote an article about some of the new changes in the mortgage industry, I hope you learned a few things from the examples I gave you. But you know, most new clients I work with still have the impression that the mortgage industry is tightening up; so much that it’s nearly impossible to purchase a home or refinance your existing mortgage (Click here to take a look at this Seattle Times article to see what I mean – <a href=”http://seattletimes.nwsource.com/html/businesstechnology/2008106146_webbank11.html”>http://seattletimes.nwsource.com/html/businesstechnology/2008106146_webbank11.html</a&gt;). This is simply not true.

It is true that the lenders are tightening up there guidelines…there’s no doubt about that but not so much that it’s impossible to get financing. In fact most lenders still have very easy to manage guidelines and as long as you have a good mortgage consultant that stays up to date on the changes in the market, you will be fine.

I have worked with several clients over the past couple months that have had 580 credit scores, are purchasing homes with less than 5% down and have been able to keep there rates in the mid 6’s on a 30 year fixed loan.

The fact of the matter is that rates are still the lowest they have been in 40 years! If you don’t believe me click here (<a href=”http://finance.yahoo.com/echarts?s=%5ETNX#chart1:symbol=^tnx;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined”>http://finance.yahoo.com/echarts?s=%5ETNX#chart1:symbol=^tnx;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined</a>) to go to Yahoo Finance and view the 10 Year Treasury Note. This Index has a direct impact on the mortgage rates and is a good reflection of where current interest rates are at.

Now is a better time than ever to purchase a home or refinance your existing mortgage. So don’t let tightening lending guidelines scare you away from taking advantage of a great market!

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I have a big announcement that I wanted to share with you. Have you heard about the new tax credits for 1st time homebuyers? If you haven’t, you could be missing out on up to $7,500.00 in tax credits for your 2008 or 2009 tax returns!

The first thing you may be asking is how can you tell if you are considered a 1st time homebuyer? Well, that’s easy, if you have NOT owned a home in the last 3 years, then you are a 1st time homebuyer. So if that’s your case…listen up!

A new home-purchase housing bill approved by Congress and signed by President Bush will allow for major tax credits for 1st time homebuyers purchasing a home between April 9, 2008 and June 30, 2009. What this means is that if you have not owned a home in the last 3 years or are thinking of purchasing your very 1st home AND can close before the end of June, 2009, you may be eligible for up to a $7,500.00 credits on your federal taxes for 2008 or 2009 ($3,750.00 if you file as a single person)!

Example: You owe $2,500.00 for your 2008 taxes, but you also purchased a home with you spouse. With the maximum tax credit of $7,500.00, you would now be receiving a $5,000.00 credit back from the IRS! (Since the tax credit is considered “refundable” if you owe the IRS less than what your credit would be, you would receive the difference back from the government in the form of a refund.)

How does it work?

So you may be curious how it all works and what the guidelines look like, or maybe like me you are a little skeptical…well here’s a quick overview of the final form of the bill.

–          Any home restrictions? No, you can choose any house type, amount, size…anything. There is no regulation on the type or price of the home you would be purchasing. As long as the home is purchase by a 1st time homebuyer between the designated time period, you will receive the tax credit.
–          Who is eligibly? – Any first time homebuyer purchasing a home between April 9, 2008 and June 30, 2009.
–           Are there income limitations? Yes, if you make over $150,000 per couple or $75,000 per single the tax credit maximum of $7,500.00 will begin to phase down in increments.
–          Any other restrictions? Yes, you are not eligible if you are an illegal immigrant or have financed the property using a state or local housing agency tax-exempt bond mortgage or do not plan to use the house as your principal residence.

Do you have to payback the credit?

Unlike some other credits that are available this one will be required to be paid back, however it will be over an extended period of time. Starting in the second tax year after your purchase and continuing for up to 15 years, taxpayers are expected to make pro-rated repayments to the government on their federal filings. Over a 15-year payback period for the full $7,500.00 credit, the cost would only be $500 a year.

Ultimately, the new tax credit is very much like an interest-free loan for up to $7,500. You pay the principal back in increments over time, but there’s no interest charge to you.

How can you claim the credit?

Well, that’s the easy part. After you have purchased the home and met the guidelines as an eligible borrower, you would just request the credit on your 2008 or 2009 tax returns. It’s that simple.

If you would like more information about this great program for 1st time homebuyers you can also go to <a href=”http://www.federalhousingtaxcredit.com/”>http://www.federalhousingtaxcredit.com/</a&gt; or give me a call and we can discuss your options.

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