Audrey's Adventures in Real Estate

 

First Time Homebuyers - In my opinion, this is one of the best times to buy in the last 10 years. Here are a few reasons why.

• Home values are done 10% to 15% in many areas

• Many foreclosures to choose from, possibly getting a better deal

• Mortgage interest rates are just about the lowest in 25 years - interest rates from 4.5% to 5.5%

• $8,000 first time homebuyers tax credit - Up to $8,000 depending on your purchase price
  

 

 

The tax credit was revised in the 2009 stimulus bill. So how does the first time homebuyers tax credit work and how different is it from last years $7,500 tax credit?  It's very simple and I won't got into full details, just the basics. But let's first define a first time home buyer - someone who had not owned a home 3 years previous to January 1st, 2009. In regards to the $7,500 tax credit, you couldn't own a home from July 2, 2005, through July 1, 2008. This revived tax credit is good for any first time homebuyer buying after December 31st, 2008 and up to November 31st, 2009. 

 

So what do you need to know?

• The maximum tax credit is $8,000 for either a single taxpayer or a married couple filing jointly. It is 10% of the purchase price. So in order to get the maximum credit, the purchase price must be $80,000 or more.

• This tax credit is not paid back like the first one of $7,500.

• There are income restrictions which can range from $150,000 to $170,000 for a joint return or from $75,000 to $95,000 for a single return. There are other factors involved when determining the actual income restrictions.

• This credit can't be used if you are buying a home from a close relative, which is to include a spouse, a grandparent, child, or even a grandchild.

• You can only use this tax credit for your primary home, not for a second home or an investment property.

• Purchasers who utilize revenue bond financing can use this credit. With the $7,500 credit, this was not allowed.

• If you sell your home within 3 years of the purchase date, the entire credit is recaptured.

 

 

 

There are a few ways to obtain this first time homebuyers tax credit. You can certainly file for your monies after you buy your dream house. You can also file an amended return if you buy your home after April 15th. But there is one other way to obtain some of this tax credit before you buy your home. Here is how.

 

If you believe that you are buying a home prior to the deadline date of December 1st, 2009, you can actually reduce your income tax withholdings. You can reduce up to the amount of the credit allowed, which will allow you to accumulate cash. This is done by raising your take home income, in which the money accumulated can then be applied to the purchase of your new home.

 

I am not a tax accountant, so it is mandatory that you speak to your accountant. But you would need to adjust your withholdings amount on your W-4 through your employer or if self-employed, through your quarterly estimated tax payments. Here are the rules and guidelines for your income tax withholdings.  IRS publication 919 in how to adjust your withholdings. Keep in mind, if you don't use this money, you will have to repay it back. Overall, the $8,000 tax credit should be thought about when buying a new home.

 

 

Disclosure : This information is based on what I have read in regards to the new stimulus bill of 2009. Please talk to your tax accountant when it comes to the specifics of this tax credit and in regards to gifts and what is allowed before being taxed.

 

 

 

 

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

Long & Foster Leader to Get Top FHA Post

By: Diana Olick, CNBC Real Estate Reporter | 21 Mar 2009 | 08:01 PM ET

President Obama is planning to name the head of Long & Foster Real Estate to lead the Federal Housing Administration, CNBC has learned.

  

Dave Stevens

Dave Stevens, president and chief operating officer at Long & Foster, likely will be named to the post Tuesday or Wednesday, sources said.

With housing at the centerpiece of the White House's economic rescue plan, the leader of the housing agency will be critical in making sure the plan is implemented.

Among Obama's goals are to help rescue homeowners facing foreclosure and to improve the regulatory process in the mortgage industry. FHA would be central in dealing with many of the issues the president has outlined.

David H. Stevens is a personal friend of JMac while also serving as President and Chief Operating Officer of the Long & Foster Companies which includes Long & Foster Real Estate and its' Affiliated Businesses including Mortgage, Title, Insurance, and Home Service Connections, and David joined the Long & Foster Companies in July, 2006 as President of Affiliated Businesses. Prior to joining The Long & Foster Companies, Stevens was Executive Vice President, National Wholesale Manager responsible for all sales, operations, and finance for Wells Fargo Home Mortgage's wholesale channel.

Prior to his joining Wells Fargo Home Mortgage, Stevens was Senior Vice President of the Single family business at Freddie Mac where he was responsible for all sales, marketing, affordable lending, product development, communications, and loan prospector for the firm. In this role, David served as lead spokesperson for the firm and managed all aspects related to sales, customer management, market share, and business strategy.

Stevens began his career at World Savings bank, where after 16 years; he was promoted to Group Senior Vice President, National Sales Manager for the mortgage division.

Stevens was the founding Executive sponsor of the Woman's Mortgage Industry Network, and coordinated the first Latino initiative joint venture with Freddie Mac and Latino mortgage industry leaders. He currently sits on the Board of Directors for Long & Foster and the Real Estate Settlement Service Providers Council.

If you are going to boogie, learn to dance. 

As many of you know, the Mortgage Market is changing faster than Tom Welling's Superman character into his "get-up" in the television show, Smallville.  It's truly a jungle out there and you'll need a Machete, Cargo Field Pants, and the proper Guide to navigate you through the ever growing foliage.  As a guide in the jungle that is the Mortgage Industry, I wanted to give some simple bits of information to arm you on your journey.

In no particular order, please take note of the following as they may be pertinent along your travels:

• As of April 1st, 2009, FHA will reduce the LTV's (loan amount compared to the value of your home) on cash-out transactions.  It currently is 95% but that will be cut back to 85% real soon.  To ensure you can get in before the guideline changes, an appraisal case number must be assigned to your home before said date.
• 100% Financing is still available!  Yet, the only two products currently sporting this popular product are VA & USDA Loans.  For more information and shameless self-promotion on the latter, click here.  Might I add that if you are going to utilize 100% Financing, try to ensure you have money in the bank after the fact.  Being a homeowner bears certain responsibilities.  God forbid something goes wrong and you don't have Lenny The Landlord to fix the issue.  You don't when you own a home.  The responsibility falls on you.
• Know your Credit Score.  I can't stress how important that is these days.  I got word from one investor today who has changed their minimum credit score on ALL Mortgage Products to 660.  Most are at 620.  A few still may go below that but proceed with caution.  Know the rules and learn to use them to your advantage.  For more extensive insight on Credit, grab that mouse and left click right here.
• Pay close attention to what homes like yours are selling for (not just being listed for) in your area.  That's a good indicator of what your home is currently worth in this market.
• While the media may give you the heads up in the drop in interest rates, contact your Mortgage Professional to get the real scoop.  Taking the anchor of CNN's advice on where Mortgage Rates are at are akin to asking me what the weather will be like tomorrow.  By the way, you can expect a balmy day with hints of fog glazing the ides of morning... turning into a slightly breezy, overcast, but generally nice day.  High will be 99 Degrees.  Low will be -20.  But don't quote me on that.
• If you are considering buying a home in the least bit, be aware of the First-Time Homebuyer Tax Credit.  It could prove to be another incentive (in addition to low interest rates and a large amount of inventory) to take that next step in owning your own home.  It isn't a reason in of itself, yet it is icing on what could be a very delicious piece of cake.

I will be writing about five more useful tips very soon.  I wanted to keep this short and sweet, like Ryan Seacrest:)  Besides, you only have so much time on your hands while you sift your way through this jungle.

And if you aren't already a homeowner, you may want to take that leap.  If you have the right Guide, you aren't just drawing on faith when you are in mid-air.

 

About The Author:  Jason Sardi has been on the lending side of the Real Estate Business for over eight years.  His passion for helping people and general disdain for con-artist blowhards has kept him trying to do right by as many people as possible along the merry way.  You can reach this happy chap by email @ jsardi@ihmci.com or by phone @ 610-439-2166 ext. 229.  He's a survivor in that jungle out there and has the scars to prove it:)

Do what??  Please read and share your thoughts. This is crazy!! 

SHORT SALE APPROVAL LETTER CONTAINS UNACCEPTABLE CONDITION

 

We have just been alerted to the fact some lenders have a new form of short sale approval/estoppel letter, in which the lender now attempts to retain the right to invalidate a transaction for events which may have occurred at the loan's inception or in our transaction.    In one particular demand, the following condition was found in paragraph 16 and read as follows:

 

"If the property was acquired by any means of fraud, [lender's name] reserves the right to pursue any and all actions available to it to pursue any and all actions available to it to offset its losses.   If it is determined that Sellers and/or Buyers participated in any way to the fraud, this short sale will be void, and the Note and Security Instrument will remain in full force and effect."

 

If a similar provision or other conditional language appears in a payoff/estoppel letter from your short sale lender, you are NOT authorized to close the transaction unless the letter is amended in writing to remove the offending provision. 

 

First American cannot insure the new purchaser or the lender, if the short sale lender purports to reserve the right to void a conveyance and maintain its lien after closing and disbursement.

 

While few provisions have been so blatant as to purport to void the transaction, it serves to remind all of us of the importance of carefully reviewing not only your short sale letters but also all of your lender's closing instructions, as these traps are sometimes buried in vague language deep in the body of the letter.

 

We have also been advised of IRS payoff/estoppel letters in short sale transactions which state they will refuse to satisfy an IRS lien if it is determined after closing that the value of the property to the IRS was greater than they thought.

 

All of this is yet another reminder that all short sale approval letters have conditions for the lender's agreement to take a short pay off to be effective.  If there is ANY provision which purports to allow the lender or the IRS the right to refuse a reconveyance after closing, do not complete your closing without contacting your local First American counsel.

 

 The above notice is courtesy of First American Title.

Working as a Metrowest Massachusetts Realtor one of the questions I am asked most often is when I think the market will turn around? While I don't pretend to have a crystal ball or a magic hat and certainly am not an economist, it is easy for me to see that the Real Estate market in Metrowest Massachusetts will not be changing all that much in the next year.

Let me say that this is not about being a pessimist or being negative. This is about being very realistic and honest. Over the last six months I have gone on a number of listing interviews where the seller has decided not to sell their home because they want to wait "till the market comes back". One of the things that I find amusing is the belief by many that the market is going to come back overnight.

Here in Metrowest Massachusetts the Real Estate market peaked in the Spring of 2005. The years prior to 2005 were marked by a run up in home values like we had never seen before. There were years during this time where property values increased by over 10%. These values were not sustainable much like other areas around the country.

Depending on what town you are located in values have dropped by around 20-25% since the peak. Are we near the bottom? That is anybody's guess at this point but if I were a betting man my money would not be on a recovery this year.

One of the things that I find most fascinating about the decision process is a sellers unwillingness to part with the lost equity on their current home, even though they will be turning around and purchasing another home under the same conditions.

In the article I wrote selling your home in a buyers market this concept is explained in greater detail. It seems that people get so caught up in their loss that they forget that when they go ahead and buy another home that property would have also dropped in value.

Another way to rationalize the Real Estate market and what kind of appreciation is necessary to get back to where we were at the market peak is to look at stocks.

Lets say you purchase a stock for $100 dollars and it goes down by 25%. The stock is now worth $75 dollars. Many would incorrectly assume that if the stock goes back up by 25% it would be worth $100 again. WRONG - it would be worth $93.75. The stock needs to appreciate around 33.5% just to get back to break even! It works the same way with housing folks but on a larger scale.

If you owned a home worth $500,000 in the Spring of 2005 and it has dropped by 25% it is now worth $375,000. Well guess what if the market goes up 25% the home will be worth $468,750. Still a long way off from $500,000.

Most economists predict that once we do finally hit bottom we will only see a more historical norm of 2-3% yearly appreciation on our homes. Do the math - with this kind of reality check it is very easy to see why it is going to take a very long time to get to the levels were were at prior to the Real Estate correction.

Some food for thought. As of this writing interest rates are outstanding hovering near 5%. There is talk that due to the massive influx of capital into the credit system that interest rates could be headed to 4.5%!!

If you have wanted to sell your home for whatever reason and are not because you don't want to lose the equity you once had then you could be making a huge mistake.

Interest rates are at a once in a life time level. When the economy does finally improve interest rates this low will not last. Interest rates should be a big X factor in your decision making process.

Seriously folks it could be 5-10 years before we get back to the levels of 2005. What are the chances that interest rates will be where they are when that finally happens? When your home finally does get back to 2005 levels so will all the other homes in the area.

Stop worrying about lost equity if you really want to move.

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About the Author: The above Real Estate information on the Metrowest Massachusetts Real Estate Market what does the future hold was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest MA Realtor. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

 

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