I read this today, by Barry Habib, and wanted to pass it on..."One very important note – the Fed took the time to reiterate that their Mortgage Backed Security purchase program will end on March 31, 2010 as previously stated. There had been some speculation that the program might continue beyond the March 31st
date, but the inclusion of this reiteration in the Fed’s Policy Statement leads us to believe that the Fed is trying to make it clear that this program will terminate as scheduled. It’s important for us to get the word out to our clients, who may be banking on this program being available for a longer period of time."
Although I have no crystal ball, this does make us believe that we will see rates go up in 2010 if the Feds stop buying MBS. Those of you that have buyers wavering on buying still, (hoping that prices may drop more), may like to know that an increase in interest rates could offset any potential savings in their payment should prices dip. Also, anyone who may be wanting to refi, would probably benefit from doing so now while rates are staying down.
Thursday, December 17, 2009
Tuesday, December 15, 2009
Rates stay down, Fannie tightens guidelines
Rates continue to stay low with the 30 year fixed under 5%.
Lots of changes coming in for next year...but effective December 12th, Fannie Mae has put a max debt to income ratio of 45% on borrowers. So, buyer's total outgoing debt, including their future mortgage payment, taxes, insurance, HOA will have to be 45% (max) of their household / qualifying income.
This is going to lower a lot of pre-qualified borrowers' approval amounts and make it harder for others to qualify for what they want....but we can still look at portfolio lenders, FHA, VA and possibly some Freddie Mac products that haven't yet implemented this new guideline. So, a good thing to investigate with your borrowers. What they were pre-approved for last month may not be the case anymore.....
Dave
Lots of changes coming in for next year...but effective December 12th, Fannie Mae has put a max debt to income ratio of 45% on borrowers. So, buyer's total outgoing debt, including their future mortgage payment, taxes, insurance, HOA will have to be 45% (max) of their household / qualifying income.
This is going to lower a lot of pre-qualified borrowers' approval amounts and make it harder for others to qualify for what they want....but we can still look at portfolio lenders, FHA, VA and possibly some Freddie Mac products that haven't yet implemented this new guideline. So, a good thing to investigate with your borrowers. What they were pre-approved for last month may not be the case anymore.....
Dave
Tuesday, November 24, 2009
Monday Mortgage Update
Here is your Monday Mortgage Update: (On Tuesday)
1st FHA has pushed back (again) the elimination of “Spot Approvals” on Condos to February 1st, 2010.
Rates have stayed stable and low for most of this year, (and down to record lows again over the last few days) because the Feds are purchasing mortgage-back securities (MBS) weekly. I read an article in Mortgage News Daily this morning that explains what’s going on and the future…Here’s the highlights of the article: The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.
This week's net purchases pushed the Federal Reserve's aggregate total over the one trillion dollar mark. Since the inception of the program in January 2009, the Fed has spent $1.02 trillion in the agency MBS market, or 81.8 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.
So, the Feds, by purchasing these MBS, are keeping rates stable and low….only $228 billion left.
1st FHA has pushed back (again) the elimination of “Spot Approvals” on Condos to February 1st, 2010.
Rates have stayed stable and low for most of this year, (and down to record lows again over the last few days) because the Feds are purchasing mortgage-back securities (MBS) weekly. I read an article in Mortgage News Daily this morning that explains what’s going on and the future…Here’s the highlights of the article: The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.
This week's net purchases pushed the Federal Reserve's aggregate total over the one trillion dollar mark. Since the inception of the program in January 2009, the Fed has spent $1.02 trillion in the agency MBS market, or 81.8 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.
So, the Feds, by purchasing these MBS, are keeping rates stable and low….only $228 billion left.
Monday, November 16, 2009
Your Quick Monday Mortgage Update
- Rates continue to stay low!
- The investor community, Wells, Citi, and B of A are all tightening criteria for FHA and VA loans, including raising minimum credit scores. This is most likely the result of changes the FHA is making, and keep in mind FHA has terminated 8 lenders this year.
- California Association of Realtors reports that entry-level housing affordability reached 64 percent in the 3rd quarter of 2009.
Wednesday, November 4, 2009
closer to a tax credit extension
Hello all- Were moving forward towards a tax credit extension. CNN had this report regarding the tax credit extension.....I put the highlights below and a link to the full article below that. Keeping you posted! -
Senate throws a lifeline to the joblessLawmakers pass bill extending unemployment benefits by up to 20 weeks. Legislation also extends homebuyer tax credit into next year.
NEW YORK (CNNMoney.com) --
After weeks of partisan debate, the Senate voted on Wednesday to lengthen unemployment benefits by up to 20 weeks and to extend the $8,000 homebuyer tax credit. The measure now moves to the House, which passed its own benefits extension in September, giving an additional 13 weeks in high-unemployment states. The two bills must now be reconciled, though the House is expected to support the Senate's version. "Now that this legislation has passed the Senate, I will bring it to the House Floor for a vote as early as tomorrow," said House Majority Leader Steny H. Hoyer of Maryland. The bill would then move to the White House for the president's signature. Last week, the administration said it supports extending benefits. The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30. The Senate's bill also created a $6,500 credit for those who buy a home after owning one for the last five years. That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. The Senate bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers. See the full article here: http://money.cnn.com/2009/11/04/news/economy/Extending_unemployment_benefits/index.htm?postversion=2009110418
Senate throws a lifeline to the joblessLawmakers pass bill extending unemployment benefits by up to 20 weeks. Legislation also extends homebuyer tax credit into next year.
NEW YORK (CNNMoney.com) --
After weeks of partisan debate, the Senate voted on Wednesday to lengthen unemployment benefits by up to 20 weeks and to extend the $8,000 homebuyer tax credit. The measure now moves to the House, which passed its own benefits extension in September, giving an additional 13 weeks in high-unemployment states. The two bills must now be reconciled, though the House is expected to support the Senate's version. "Now that this legislation has passed the Senate, I will bring it to the House Floor for a vote as early as tomorrow," said House Majority Leader Steny H. Hoyer of Maryland. The bill would then move to the White House for the president's signature. Last week, the administration said it supports extending benefits. The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30. The Senate's bill also created a $6,500 credit for those who buy a home after owning one for the last five years. That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. The Senate bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers. See the full article here: http://money.cnn.com/2009/11/04/news/economy/Extending_unemployment_benefits/index.htm?postversion=2009110418
Thursday, October 29, 2009
Progress towards reversing HVCC
We are making progress in reversing HVCC. As most of you know HVCC has been a mess. Its caused so much difficulty dealing with appraisals, home values and has slowed the escrow process. Amendment 3126 will end HVCC. It still has to pass the House, the Senate and be signed off by the President. So, if you believe H...VCC should be reversed and you haven't signed this petition...please do so now. Its so critical to protect our industry and to benefit our clients. Here's the website. http://www.hvccpetition.com/
Article from CNN about the $8000 tax credit
$8,000 home credit still in play
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
The Obama administration wants the credit extended for a "limited period," Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
The Obama administration wants the credit extended for a "limited period," Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
Senators agree to extend homebuyer tax credit
Senators agree to extend homebuyer tax credit
By STEPHEN OHLEMACHER (AP) –
1 hour agoWASHINGTON —
Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November.Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.Majority Democrats have refused to add the amendments.Copyright © 2009 The Associated Press. All rights reserved.
By STEPHEN OHLEMACHER (AP) –
1 hour agoWASHINGTON —
Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November.Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.Majority Democrats have refused to add the amendments.Copyright © 2009 The Associated Press. All rights reserved.
Thursday, October 22, 2009
letter to me from Congressman Duncan Hunter regarding the tax credit extension
Dear David:
Thank you for contacting me with your support for extending the homebuyer tax credit. I welcome the opportunity to respond to you on this issue.
I agree with you that the current $8,000 tax credit for first time buyers has had a positive effect on the housing market this year. You will be pleased to know that I am a cosponsor of the Homebuyer Tax Credit Act of 2009, which would, in an effort to stimulate the nation's declining housing market, extend this credit and offer an increased $15,000 credit to all home purchases through 2010.
Like you, I believe that we must be aggressive in addressing the challenges in our housing market and I support providing tax credits for new homes. I agree with you, that stimulating the housing market is one of the best ways Congress can help accelerate the recovery of the economy. A tax credit for individuals to purchase new homes not only contributes to the real estate industry, but also stimulates the construction industry and creates jobs.
Please be assured that I will keep your specific thoughts in mind as we continue to discuss this issue in Congress. Thank you again for contacting me. If you have any further questions or concerns, please do not hesitate to let me know.
Sincerely,
Duncan Hunter
Member of Congress
Please visit my website at hunter.house.gov to sign up for my e-newsletter and receive electronic updates.
Thank you for contacting me with your support for extending the homebuyer tax credit. I welcome the opportunity to respond to you on this issue.
I agree with you that the current $8,000 tax credit for first time buyers has had a positive effect on the housing market this year. You will be pleased to know that I am a cosponsor of the Homebuyer Tax Credit Act of 2009, which would, in an effort to stimulate the nation's declining housing market, extend this credit and offer an increased $15,000 credit to all home purchases through 2010.
Like you, I believe that we must be aggressive in addressing the challenges in our housing market and I support providing tax credits for new homes. I agree with you, that stimulating the housing market is one of the best ways Congress can help accelerate the recovery of the economy. A tax credit for individuals to purchase new homes not only contributes to the real estate industry, but also stimulates the construction industry and creates jobs.
Please be assured that I will keep your specific thoughts in mind as we continue to discuss this issue in Congress. Thank you again for contacting me. If you have any further questions or concerns, please do not hesitate to let me know.
Sincerely,
Duncan Hunter
Member of Congress
Please visit my website at hunter.house.gov to sign up for my e-newsletter and receive electronic updates.
Tuesday, October 20, 2009
Response from Senator Feinstein about tax credit
I filled out the form on NAR's website in order to send my represenatives my belief that the tax credit should be extended. Just got an emailed reply from Senator Feinstein. Here it is:
Dear Mr. Cummins:
Thank you for contacting me to express your support for expanding the first-time homebuyer tax credit. I appreciate the time you took to write and welcome the opportunity to respond. In July 2008, the Housing and Economic Recovery Act of 2008 (Public Law 110-289) provided first-time homebuyers with a tax credit, equivalent to an interest-free loan, worth up to $7,500. The tax credit applied to homes purchased between April 9, 2009 and July 1, 2009. As the housing situation worsened in the fall of 2008, additional action was taken to prevent further declines in home values. Congress included in the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), a more robust first-time homebuyer tax credit. Specifically, the tax credit was increased to $8,000 for homes purchased in 2009 and will not have to be repaid. I understand your belief that the first-time homebuyer tax credit should be increased and expanded further. As you know, on June 10, 2009, Senator Johnny Isakson (R-GA) introduced the "Home Buyer Tax Credit Act of 2009" (S. 1230), which would increase the credit to up to $15,000, remove income eligibility limits, and expand it to include homebuyers purchasing homes other than their first. S. 1230 has been referred to the Senate Finance Committee, of which I am not a member. Please know that I will keep your support for this legislation in mind should it come before the full Senate. Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein
United States Senator
Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.
Dear Mr. Cummins:
Thank you for contacting me to express your support for expanding the first-time homebuyer tax credit. I appreciate the time you took to write and welcome the opportunity to respond. In July 2008, the Housing and Economic Recovery Act of 2008 (Public Law 110-289) provided first-time homebuyers with a tax credit, equivalent to an interest-free loan, worth up to $7,500. The tax credit applied to homes purchased between April 9, 2009 and July 1, 2009. As the housing situation worsened in the fall of 2008, additional action was taken to prevent further declines in home values. Congress included in the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), a more robust first-time homebuyer tax credit. Specifically, the tax credit was increased to $8,000 for homes purchased in 2009 and will not have to be repaid. I understand your belief that the first-time homebuyer tax credit should be increased and expanded further. As you know, on June 10, 2009, Senator Johnny Isakson (R-GA) introduced the "Home Buyer Tax Credit Act of 2009" (S. 1230), which would increase the credit to up to $15,000, remove income eligibility limits, and expand it to include homebuyers purchasing homes other than their first. S. 1230 has been referred to the Senate Finance Committee, of which I am not a member. Please know that I will keep your support for this legislation in mind should it come before the full Senate. Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein
United States Senator
Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.
Saturday, October 17, 2009
$8000 tax credit extension?
Let me preface this with a quick disclaimer. I am not a tax professional and I am not giving tax advice here….
As we near the November 30 deadline for the $8000 tax credit the looming question as to whether it will be extended is, well looming. With the possibility of an extension is also the idea of an "expansion" that would open it to buyers beyond the "first time" buyer. It seems that everyone wants their name on the bill that will extend the credit and so there are plenty out there trying. Both Obama and Congress are talking about it as the deadline approaches.
It has made a difference in our market. The feeding frenzy that started in about July/August I believe was due to the fact this deadline was driving buyers out. This assumption is based purely on the simple fact that every call, since mid-summer, I have received from a new buyer wanting to be pre-qualified for a home loan mentioned, "I need to buy before Nov 30" or "I want that tax credit". It's driving buyers to get in the game. And why not? Where else are you going to pick up a quick $8000? Most of these first time home buyers are used to getting a little a tax refund at the end of the year but this is a significant amount of money. The buyers I know plan to use the money to fix the house up, (as many of these foreclosures, need a little work) or they plan to replace their savings. Imagine you buy something for $300,000.00. Going FHA, you put down 3.5% ($10,500) of your hard earned money. Now imagine by using that money to buy a house you could potentially put 75% of it back in the bank? It's a great incentive to buy…now. Truth be told if you're not in escrow by this weekend your chances to get that credit are getting slim. So will they extend it? The house has unanimously passed an extension that would give buyers who served overseas in the military a 6 month extension, (measure H.R. 3590). It still needs to go to the senate. And the National Association of Realtors, (NAR) testified last Wednesday to the US House of Small Business Committee that an extension was critical in reducing the amount of inventory the housing market currently has. They also are suggesting an expansion on the tax credit. They even posted a video on You Tube.
NAR's website also has a quote from House Speaker Pelosi (D-CA), on October 8th, where she said, "Yes, there is under consideration whether we extend the first time homeowners credit. And the question is, would that be just first time homeowners or would you open it up to other purchasers of homes?"
The California Association of Realtors, (CAR) put out this "call to action" on their website: "The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey."
The website further explains CAR's views and gives you step by step instructions on how to contact your congressional representative.
So, while the Feds are going to keep us on the edge of our seats possibly right up to end, there are things you can do to help the cause. If you believe the tax credit should be extended check out the CAR or NAR websites to see how you can help.Get more information about the current 2009 tax credit from NAR here. And, you can get more information about buying a home or getting pre-approved by emailing me at davejcummins@gmail.com. You can also get daily updates by becoming a fan here on FaceBook too
As we near the November 30 deadline for the $8000 tax credit the looming question as to whether it will be extended is, well looming. With the possibility of an extension is also the idea of an "expansion" that would open it to buyers beyond the "first time" buyer. It seems that everyone wants their name on the bill that will extend the credit and so there are plenty out there trying. Both Obama and Congress are talking about it as the deadline approaches.
It has made a difference in our market. The feeding frenzy that started in about July/August I believe was due to the fact this deadline was driving buyers out. This assumption is based purely on the simple fact that every call, since mid-summer, I have received from a new buyer wanting to be pre-qualified for a home loan mentioned, "I need to buy before Nov 30" or "I want that tax credit". It's driving buyers to get in the game. And why not? Where else are you going to pick up a quick $8000? Most of these first time home buyers are used to getting a little a tax refund at the end of the year but this is a significant amount of money. The buyers I know plan to use the money to fix the house up, (as many of these foreclosures, need a little work) or they plan to replace their savings. Imagine you buy something for $300,000.00. Going FHA, you put down 3.5% ($10,500) of your hard earned money. Now imagine by using that money to buy a house you could potentially put 75% of it back in the bank? It's a great incentive to buy…now. Truth be told if you're not in escrow by this weekend your chances to get that credit are getting slim. So will they extend it? The house has unanimously passed an extension that would give buyers who served overseas in the military a 6 month extension, (measure H.R. 3590). It still needs to go to the senate. And the National Association of Realtors, (NAR) testified last Wednesday to the US House of Small Business Committee that an extension was critical in reducing the amount of inventory the housing market currently has. They also are suggesting an expansion on the tax credit. They even posted a video on You Tube.
NAR's website also has a quote from House Speaker Pelosi (D-CA), on October 8th, where she said, "Yes, there is under consideration whether we extend the first time homeowners credit. And the question is, would that be just first time homeowners or would you open it up to other purchasers of homes?"
The California Association of Realtors, (CAR) put out this "call to action" on their website: "The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey."
The website further explains CAR's views and gives you step by step instructions on how to contact your congressional representative.
So, while the Feds are going to keep us on the edge of our seats possibly right up to end, there are things you can do to help the cause. If you believe the tax credit should be extended check out the CAR or NAR websites to see how you can help.Get more information about the current 2009 tax credit from NAR here. And, you can get more information about buying a home or getting pre-approved by emailing me at davejcummins@gmail.com. You can also get daily updates by becoming a fan here on FaceBook too
Friday, October 16, 2009
California Association of Realtors, (CAR) supports tax credit extension
Here's a post from C.A.R.'s facebook page:
The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey.
C.A.R. supports an extension of the federal tax credit through 2010 and to include all homebuyers—not just first-timers. Historically, housing has led the nation out of economic downturns, and can do so again.
As the expiration date for this successful program looms, it is imperative that all REALTORS® take action by contacting their congressperson and urging them to extend this vital home-buying incentive.
Call your congressional representative immediately!
1. Dial 1-800-961-3302.
2. Enter your NRDs i.d. to be directly connected to the office of your representative.
3. Ask your representative to vote for extending the first-time homebuyer tax credit.
see it here:
http://www.car.org/governmentalaffairs/federal/call4actiontaxcredit/
The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey.
C.A.R. supports an extension of the federal tax credit through 2010 and to include all homebuyers—not just first-timers. Historically, housing has led the nation out of economic downturns, and can do so again.
As the expiration date for this successful program looms, it is imperative that all REALTORS® take action by contacting their congressperson and urging them to extend this vital home-buying incentive.
Call your congressional representative immediately!
1. Dial 1-800-961-3302.
2. Enter your NRDs i.d. to be directly connected to the office of your representative.
3. Ask your representative to vote for extending the first-time homebuyer tax credit.
see it here:
http://www.car.org/governmentalaffairs/federal/call4actiontaxcredit/
Tuesday, October 6, 2009
Tuesday, September 22, 2009
Why do you need title insurance?
Title Insurance. It's a term we hear and see frequently -- we see reference to it in the Sunday real estate section, in advertisements and in conversations with real estate brokers. If you've purchased a home before, you're probably familiar with the benefits and procedures of title insurance. But if this is your first home, you may wonder, "Why do I need another insurance policy? It's just one more bill to pay."
The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and your mortgage lender, want to make sure that the property is indeed yours lock, stock and barrel and that no individual or government entity has any right, lien, claim to your property.
Title insurance companies are in business to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly and that your interests as a homebuyer are protected to the maximum degree. Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders and others who have an interest in a real estate transfer. Title companies routinely issue two types of policies -- "owner's," which cover you, the homebuyer; and "lender's," which covers the bank, savings and loan or other lending institution over the life of the loan. Both are issued at the time of purchase for a modest, one-time premium.
Before issuing a policy, however, the title company performs an extensive search of relevant public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using either public records or more likely, information gathered, reorganized and indexed in the company's title "plant."
With such a thorough examination of records, any title problems usually can be found and cleared up prior to your purchase of the property. Once a title policy is issued, if for some reason any claim which is covered under your title policy is ever filed against your property, the title company will pay the legal fee involved in defense of your rights, as well as any covered loss arising from a valid claim. That protection, which is in effect as long as you or your heirs own the property, is yours for a one-time premium paid at the time of purchase.
The fact that title companies work to eliminate risks before they develop makes the title insurance decidedly different from other types of insurance you may have purchased. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen event, say a fire, theft or accident. The purpose of title insurance, on the other hand, is to eliminate risks and prevent losses caused by defects in title that happened in the past. Risks are examined and mitigated before property changes hands.
This risk elimination has benefits to both you, the homebuyer, and the title company: it minimizes the chances adverse claims might be raised, and by so doing reduces the number of claims that have to be defended or satisfied. This keeps costs down for the title company and your title premiums low.
Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed. Isn't sleeping well at night, knowing your home is yours, reason enough for title insurance?
This article was published by the California Land Title Association...and provided to me courtesy of Rosa Rhea of American Coast Title & Escrow, 8304 Clairemont Mesa Blvd. Suite 206, San Diego, CA, 92111, Office (858) 505-9985.
Monday, July 13, 2009
Thursday, July 2, 2009
Should you pay points?
Regardless of whether you are buying a home or refinancing an existing mortgage and whether you are using a broker or going directly to the bank; you have a choice when it comes to paying points. The cost of a point is one percent of your loan amount and is added to your closing costs. For a long time “points” have had a negative connotation amongst the general public. So, first time buyers in San Diego, looking to take their first step towards a now affordable home purchase may be confused on what to do. But, the truth is, points directly affect the interest rate on your mortgage. The higher in rate you go, the lower the points and the opposite applies.
So, a lower closing cost scenario can end up costing you more in the long run as a result of a higher interest rate. In today’s market, where a home is once again a long term investment and with the 30 year fixed rate as low as it is, paying a point to get the lower rate can makes sense.
When you are deciding what makes the most sense it's all about “recouping”. How will the point or cost affect the rate and how much will be saved over the long term? In short, how quickly can the fee be recouped from the savings of the lower rate? Using today’s rate as an example, let’s see:
Today the 30 year fixed with no points is at 5.625%. But by paying one point we can get the interest rate down to 5.25%. If we took a $300,000 loan amount 1 point is equal to $3000. Now let’s look at the difference between the two rates. A $300,000 loan at 5.625% will equal a payment of $1727 a month. If we paid the point and got the rate down to 5.25% it lowers the payment to $1657. So for a $3000 investment we will save $70 a month. Then divide that savings, ($70) by the cost to get it ($3000) and we get 42 months. In just 3.5 years we will have recouped that point in our monthly savings. Obviously if you are planning on staying in the home for over 3.5 years then the savings is worth the investment. (It’s also unlikely that you will refinance the mortgage within 3.5 years.)
There can be many different options to fit your closing costs and interest rate needs. You can pay just a half a point or pay more; buy down the rate further with 2 points. Always ask your loan officer for the rate with and without points and have him/her show you how quickly you will recoup that fee. As a general rule of thumb if you can recoup the cost within 3-4 years it’s probably worth it, depending on your long term plans with the home. (Be warned however of loan officers that offer “no points” and then charge 1% origination. One percent is a point regardless whether it is called “origination” or a “point”.)
So, a lower closing cost scenario can end up costing you more in the long run as a result of a higher interest rate. In today’s market, where a home is once again a long term investment and with the 30 year fixed rate as low as it is, paying a point to get the lower rate can makes sense.
When you are deciding what makes the most sense it's all about “recouping”. How will the point or cost affect the rate and how much will be saved over the long term? In short, how quickly can the fee be recouped from the savings of the lower rate? Using today’s rate as an example, let’s see:
Today the 30 year fixed with no points is at 5.625%. But by paying one point we can get the interest rate down to 5.25%. If we took a $300,000 loan amount 1 point is equal to $3000. Now let’s look at the difference between the two rates. A $300,000 loan at 5.625% will equal a payment of $1727 a month. If we paid the point and got the rate down to 5.25% it lowers the payment to $1657. So for a $3000 investment we will save $70 a month. Then divide that savings, ($70) by the cost to get it ($3000) and we get 42 months. In just 3.5 years we will have recouped that point in our monthly savings. Obviously if you are planning on staying in the home for over 3.5 years then the savings is worth the investment. (It’s also unlikely that you will refinance the mortgage within 3.5 years.)
There can be many different options to fit your closing costs and interest rate needs. You can pay just a half a point or pay more; buy down the rate further with 2 points. Always ask your loan officer for the rate with and without points and have him/her show you how quickly you will recoup that fee. As a general rule of thumb if you can recoup the cost within 3-4 years it’s probably worth it, depending on your long term plans with the home. (Be warned however of loan officers that offer “no points” and then charge 1% origination. One percent is a point regardless whether it is called “origination” or a “point”.)
More Hope for Homeowners coming in the form of HARP
Hope(less) for Homeowners.....Is HARP More of the Same for San Diego Homeowners?
The Hope for Homeowners, (HFH) was a plan that went into affect last summer to help stop the amount of foreclosures taking place. The program relied on the lenders willingness to take a reduction in the loan amount. They were asked to refinance the home at 90% of the property’s value thus writing off a large portion of principal. Then the homeowner had to be willing to split their future equity with the U.S. Government. So no one participated. In fact, an article on CNN.com from May pointed out that, after 7 months, the HFH program had only helped 1 person! A far cry from the 400,000 homeowners the plan claimed it would assist.
So, will the Home Affordable Refinance Program, (HARP) end up as useless as HFH? Well, not as bad. I know I have done 2 HARP loans in my office alone since April so already that’s one more than the national average for HFH. But the HARP program is not without issues. It does reward borrowers who have kept current on their mortgage with an opportunity to refinance out of an adjustable or higher rate and into today’s lower fixed rates even if they are upside down in equity. Yesterday it was announced that the property can now be up 25% negative or 125% loan to value. This is an increase from the original 105%. As property values decline most homeowners in San Diego found they couldn’t use the program because they were more than 5% upside in value. The S&P Case-Shiller Home Price Index shows a 20% drop in San Diego home prices from April 2008 to April 2009.
However, other issues are still making it difficult for the homeowners who were supposed to be helped by this program. For example, lenders are adding their own guidelines and restrictions to the program. Plus, the newly enacted Home Valuation Code of Contact, (HVCC), which restricts conversation between loan officers and appraisers, is causing further problems. The other quirk is the home loan has to be owned by either Fannie Mae or Freddie Mac. Many homeowners who need help have loans that were never sold to Freddie or Fannie. In addition, technical issues in how the loan was recorded can keep homeowners from accurately knowing if there loan is owned by Fannie/Freddie. So, wrong information can result in an eligible property owner becoming ineligible for the program.
Overall the program has been more effective than the Hope for Homeowners, but there are still a lot of kinks to be worked out before it will be the saving grace the administration hopes it will be.
The Hope for Homeowners, (HFH) was a plan that went into affect last summer to help stop the amount of foreclosures taking place. The program relied on the lenders willingness to take a reduction in the loan amount. They were asked to refinance the home at 90% of the property’s value thus writing off a large portion of principal. Then the homeowner had to be willing to split their future equity with the U.S. Government. So no one participated. In fact, an article on CNN.com from May pointed out that, after 7 months, the HFH program had only helped 1 person! A far cry from the 400,000 homeowners the plan claimed it would assist.
So, will the Home Affordable Refinance Program, (HARP) end up as useless as HFH? Well, not as bad. I know I have done 2 HARP loans in my office alone since April so already that’s one more than the national average for HFH. But the HARP program is not without issues. It does reward borrowers who have kept current on their mortgage with an opportunity to refinance out of an adjustable or higher rate and into today’s lower fixed rates even if they are upside down in equity. Yesterday it was announced that the property can now be up 25% negative or 125% loan to value. This is an increase from the original 105%. As property values decline most homeowners in San Diego found they couldn’t use the program because they were more than 5% upside in value. The S&P Case-Shiller Home Price Index shows a 20% drop in San Diego home prices from April 2008 to April 2009.
However, other issues are still making it difficult for the homeowners who were supposed to be helped by this program. For example, lenders are adding their own guidelines and restrictions to the program. Plus, the newly enacted Home Valuation Code of Contact, (HVCC), which restricts conversation between loan officers and appraisers, is causing further problems. The other quirk is the home loan has to be owned by either Fannie Mae or Freddie Mac. Many homeowners who need help have loans that were never sold to Freddie or Fannie. In addition, technical issues in how the loan was recorded can keep homeowners from accurately knowing if there loan is owned by Fannie/Freddie. So, wrong information can result in an eligible property owner becoming ineligible for the program.
Overall the program has been more effective than the Hope for Homeowners, but there are still a lot of kinks to be worked out before it will be the saving grace the administration hopes it will be.
Friday, June 26, 2009
Last Months Home Sales
Here are last month's home sales...http://www.dqnews.com/Charts/Monthly-Charts/SDUT-Charts/ZIPSDUT.aspx
Thursday, June 18, 2009
Military: Put Your BAH Pay to Work for You
Military: Put Your BAH Pay to Work for You. VA Home Loans = No $ Down
VA Loans: 100% Financing & Great Rates Take advantage of this market
If you are in or have served in the military; it’s a great time to buy. You are eligible for 100% financing and competitive rates with a VA loan. Your mortgage payment could be less than your rent!
858-485-6100 x 102 David Cummins
VA Loans: 100% Financing & Great Rates Take advantage of this market
If you are in or have served in the military; it’s a great time to buy. You are eligible for 100% financing and competitive rates with a VA loan. Your mortgage payment could be less than your rent!
858-485-6100 x 102 David Cummins
Wednesday, June 17, 2009
Rent vs. Mortgage
There are condos in San Diego for sale starting in the low $100,000.00’s. I just closed a loan for a condo in Oceanside, the sales price was $89,000.00!
There are houses in San Diego for sale starting in the low-mid $200,000.00’s
Your estimated payment*:
$100k = $640.00 a month including property taxes!
$200k = $1281 a month including property taxes!
$300k = $1922 a month including property taxes!
(*Payment example is based on 30 year fixed mortgage at 5% interest. Rates are subject to change without notice. Payment does not include any insurance or HOA fees. Property taxes calculated at 1.25%)
There are houses in San Diego for sale starting in the low-mid $200,000.00’s
Your estimated payment*:
$100k = $640.00 a month including property taxes!
$200k = $1281 a month including property taxes!
$300k = $1922 a month including property taxes!
(*Payment example is based on 30 year fixed mortgage at 5% interest. Rates are subject to change without notice. Payment does not include any insurance or HOA fees. Property taxes calculated at 1.25%)
San Diego Home Prices
The median price of a home in San Diego is $295,000.00. Today, in San Diego 50% of San Diegans can afford a median priced home. That's up from only 9% just three years ago! With rates staying low, home prices staying low, and the feds offering an $8000 tax credit; its an opportunity in real estate that is unrivaled.
Have you thought about buying? Unsure if you can afford the payments? Call me. Tell me what you can afford each month and I will tell you what price range you should be looking at and how much you will qualify for. 858-485-6100 x 102
Have you thought about buying? Unsure if you can afford the payments? Call me. Tell me what you can afford each month and I will tell you what price range you should be looking at and how much you will qualify for. 858-485-6100 x 102
Tuesday, June 16, 2009
Monday, June 15, 2009
Rates down slightly... but last week set highest since Nov 2008
Rates last week hit the highest since November 2008. We were all pretty spoiled in the mid-high 4's. And when rates shot up to from 4.75 to 5.75 in a day-panic ensued, (2 weeks ago). But were down a little today. Basic Economics tells us that too much supply of Mortgage Backed Securities and not enough demand from buyers will cause this....The government says that they will be buying more MBS in order to keep rates low...time will tell. But-don't forget-that historically, low to mid 5's is still really low.
Dave
Dave
California "new construction" tax credit
The California "New Construction" tax credit is almost out funds....which may be a good thing in that it shows that A. People are buying homes again and B. The tax incentives are working. Of course the Fed's "first time buyer" tax credit is still available to all qualified recipients until December 2009. More info on that here: http://www.federalhousingtaxcredit.com/2009/faq.php#1
Here's a CNN article saying there's only 20% of funds left!
http://money.cnn.com/2009/06/12/real_estate/10000_California_tax_credit/index.htm?section=money_realestate
Here's a CNN article saying there's only 20% of funds left!
http://money.cnn.com/2009/06/12/real_estate/10000_California_tax_credit/index.htm?section=money_realestate
Friday, May 22, 2009
Hope(less) for Homeowners.....
Everyday, for months we got calls asking about the Hope for Homeowners program. And unfortunately, our response was always the same, "We cant help you". The program relied on the lenders to take a "haircut"....a haircut they were not willing to take. So none of them participated. Supposedly that's going to change but CNN was quick to point out that the HFH program only helped exactly 1 person so far. This is really crazy!
http://money.cnn.com/2009/05/20/real_estate/new_hope_for_homeowners/index.htm?section=money_realestate
http://money.cnn.com/2009/03/25/real_estate/new_hope_plan/index.htm?postversion=2009032512
http://money.cnn.com/2009/05/20/real_estate/new_hope_for_homeowners/index.htm?section=money_realestate
http://money.cnn.com/2009/03/25/real_estate/new_hope_plan/index.htm?postversion=2009032512
Thursday, May 21, 2009
Get Your $8000 Tax Credit Early?
The $8000 tax credit the Feds are giving “First Time Buyers” is great, but it could be getting better! Both Inmans and CNN.com have reported that the ability for buyers to access this tax credit early, to use as a down payment, is coming. It would be in the form of a bridge loan. This would help buyers, who are short on their down payment, receive these funds now; to use it as a down payment and then repay it out of their tax refund.
Here’s the link to the CNN.com article:
http://money.cnn.com/2009/05/18/real_estate/tax_credit_as_downpayment/index.htm?section=money_realestate
Here’s the link to the CNN.com article:
http://money.cnn.com/2009/05/18/real_estate/tax_credit_as_downpayment/index.htm?section=money_realestate
Friday, May 1, 2009
$8000 For Homebuyers
This article is a couple months old but it explains the new $8000 Tax Credit for "first time buyers". Its from CNN.com
Final score: $8,000 for homebuyers
First-time purchasers get a tax credit windfall if they buy before December.
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking: "I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
By Les Christie, CNNMoney.com staff writer
Last Updated: February 17, 2009: 12:13 PM ET
Final score: $8,000 for homebuyers
First-time purchasers get a tax credit windfall if they buy before December.
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking: "I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed.
Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.
And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.
By Les Christie, CNNMoney.com staff writer
Last Updated: February 17, 2009: 12:13 PM ET
Thursday, April 30, 2009
Are we at the Bottom??
Are we at the bottom?
I get that question almost every day. My answer is always, “I don’t know”. It’s impossible to gauge or tell when or where the bottom is. But if we imagine this market like a valley, we’re definitely in the “valley”. Whether were heading down further or on our way back up, time will tell. Personally I think we are heading down further….does that mean we shouldn’t buy right now? Should wait until that mysterious alluring “rock bottom status”? I say no. As an investor, you’re going to buy if the property pencils….that’s easy. But as an “owner occupying” homebuyer or first time buyer, how do you know if you should be buying right now?
Here’s why I believe you should be buying right now:
We’re in a “perfect storm” situation for future homeowners looking to get into the market. Rarely do we have this combination of buyer incentives all at once:
Low home prices. Today 50% of San Diegans can afford the median home price but just 3 years ago only 9% of SD could afford a home.
Incredibly low interest rates. With 30 year fixed rates staying in the high 4’s to low 5s and no big swings in the market, buyers can enjoy low fixed rates to help them afford more house.
Sellers, including REOs, are paying closing costs. Right now sellers are still paying closing costs. Sellers are willing to do this because of they need to sell. But as more buyers come out they won’t be forced to cough up the extra money to pay the buyer’s costs.
Tax Credits! Right now if you buy before December 1st, 2009 you can be eligible for an $8000 tax credit. A dollar for dollar tax credit. And, unlike 2008’s version this one does not have to be paid back. But you have to close before December. California is offering a $10k tax credit for new homes. That credit has certain allotted funds set aside and they are already 25% used.
It’s true we may see prices drop more this year. But the buyers are coming out! A lot of buyers that were on the fence, watching the market, are now jumping in and writing offers. The amount of clients, that I have pre-approved, and are now actively shopping and getting out bid or receiving counter offers is increasing. And as more buyers come out; the “deals” out there are going to see activity. (A Realtor in your area could advise you further, but from what I’m seeing if something is priced well its selling.)
If you are planning on living in the home, then I say, go for it. As long as you can afford the payments each month and love the home don’t let the possibility of prices dropping stop you from jumping in. Over the long term the home values will come back. So unless you’re your going re-sell it next year…I wouldn’t be afraid of not being at the “very rock bottom” of this market. There’s plenty of inventory out there and plenty more that’s going to hit the market soon. So we’re a ways off from seeing this market turning around. But with the amount of buyer incentives available today, there’s no reason to wait! The low interest rates alone may offset a price decline. Not to mention the additional tax incentives available now.
What do you think? Are you shopping right now? Tell me your experiences and the area you are looking in.
I get that question almost every day. My answer is always, “I don’t know”. It’s impossible to gauge or tell when or where the bottom is. But if we imagine this market like a valley, we’re definitely in the “valley”. Whether were heading down further or on our way back up, time will tell. Personally I think we are heading down further….does that mean we shouldn’t buy right now? Should wait until that mysterious alluring “rock bottom status”? I say no. As an investor, you’re going to buy if the property pencils….that’s easy. But as an “owner occupying” homebuyer or first time buyer, how do you know if you should be buying right now?
Here’s why I believe you should be buying right now:
We’re in a “perfect storm” situation for future homeowners looking to get into the market. Rarely do we have this combination of buyer incentives all at once:
Low home prices. Today 50% of San Diegans can afford the median home price but just 3 years ago only 9% of SD could afford a home.
Incredibly low interest rates. With 30 year fixed rates staying in the high 4’s to low 5s and no big swings in the market, buyers can enjoy low fixed rates to help them afford more house.
Sellers, including REOs, are paying closing costs. Right now sellers are still paying closing costs. Sellers are willing to do this because of they need to sell. But as more buyers come out they won’t be forced to cough up the extra money to pay the buyer’s costs.
Tax Credits! Right now if you buy before December 1st, 2009 you can be eligible for an $8000 tax credit. A dollar for dollar tax credit. And, unlike 2008’s version this one does not have to be paid back. But you have to close before December. California is offering a $10k tax credit for new homes. That credit has certain allotted funds set aside and they are already 25% used.
It’s true we may see prices drop more this year. But the buyers are coming out! A lot of buyers that were on the fence, watching the market, are now jumping in and writing offers. The amount of clients, that I have pre-approved, and are now actively shopping and getting out bid or receiving counter offers is increasing. And as more buyers come out; the “deals” out there are going to see activity. (A Realtor in your area could advise you further, but from what I’m seeing if something is priced well its selling.)
If you are planning on living in the home, then I say, go for it. As long as you can afford the payments each month and love the home don’t let the possibility of prices dropping stop you from jumping in. Over the long term the home values will come back. So unless you’re your going re-sell it next year…I wouldn’t be afraid of not being at the “very rock bottom” of this market. There’s plenty of inventory out there and plenty more that’s going to hit the market soon. So we’re a ways off from seeing this market turning around. But with the amount of buyer incentives available today, there’s no reason to wait! The low interest rates alone may offset a price decline. Not to mention the additional tax incentives available now.
What do you think? Are you shopping right now? Tell me your experiences and the area you are looking in.
Tuesday, April 28, 2009
Lower your Property Taxes in San Diego!
Have property values in your neighborhood dropped? You may be eligible to lower your property taxes in San Diego. You have until May 30th.
Here's the link, from the County Assessor, to get the form!
http://arcc.co.san-diego.ca.us/docs/calrev.pdf
Fill it out and send it in. Its easy to do. Let me know if you need help.
Dave
Here's the link, from the County Assessor, to get the form!
http://arcc.co.san-diego.ca.us/docs/calrev.pdf
Fill it out and send it in. Its easy to do. Let me know if you need help.
Dave
Monday, April 27, 2009
House Prices Climb Unexpectedly in Feb
Here’s an interesting article from Mortgage News Daily
House Prices Climb Unexpectedly in February
House prices unexpectedly rose in February, according to a report from the Federal Housing and Finance Administration on Wednesday.
The report showed a 0.7% month-over-month increase in U.S. house prices, following a downwardly revised 1.0% increase in January. Economists were expecting a 0.7% drop.
The largest increase was in the Pacific region, up by 3.8%, and the West South Central region, with prices climbing 1.9% month-over-month. In the West North Central region, home prices were up 1.5% and the New England area saw a 2.2% jump in prices.
The largest decrease came in the East North Central region, down 1.2%, reversing a 3.3% increase the month prior. Prices were down 0.8% in the South Atlantic region and down 0.2% in the East South Central region.
On an annual basis, house prices are down 6.5% from February 2008.
By Megan Ainscow and edited by Stephen Huebl©CEP News Ltd. 2009
See it here as well http://www.mortgagenewsdaily.com/04222009_house_prices.asp
House Prices Climb Unexpectedly in February
House prices unexpectedly rose in February, according to a report from the Federal Housing and Finance Administration on Wednesday.
The report showed a 0.7% month-over-month increase in U.S. house prices, following a downwardly revised 1.0% increase in January. Economists were expecting a 0.7% drop.
The largest increase was in the Pacific region, up by 3.8%, and the West South Central region, with prices climbing 1.9% month-over-month. In the West North Central region, home prices were up 1.5% and the New England area saw a 2.2% jump in prices.
The largest decrease came in the East North Central region, down 1.2%, reversing a 3.3% increase the month prior. Prices were down 0.8% in the South Atlantic region and down 0.2% in the East South Central region.
On an annual basis, house prices are down 6.5% from February 2008.
By Megan Ainscow and edited by Stephen Huebl©CEP News Ltd. 2009
See it here as well http://www.mortgagenewsdaily.com/04222009_house_prices.asp
A couple weeks ago I was at the Poway Realtor Caravan and another loan officer there was asked to introduce himself and say a few words. He told a quick story I thought I’d share with you.
He explained that he met with some new clients and they brought with them a quote they had received online. He couldn’t beat the closing costs they were being promised. So, he suggested they call the lender up, have them prepare a Good Faith Estimate and get an idea of exactly this internet lender was offering. The clients called from their cell phone and after a ½ an hour of being on hold finally spoke with someone who could NOT help them with their request.
As loan officers, Realtors, Title reps, there will always be someone out there cheaper…someone else can come in and undercut our offer by a few dollars. But the reason most of us have survived this market over the last few years isn’t price, its service. We can provide to our clients something more than a small discount. We can provide peace of mind and a quality of service. At the end of the day, I am here to help my clients. I truly believe I can offer something more than any website or online quote can.
95% of my business comes from referrals. My past clients are happy to refer me to their friends and family because they know I will do my best to help them. In this current market that means a lot.
He explained that he met with some new clients and they brought with them a quote they had received online. He couldn’t beat the closing costs they were being promised. So, he suggested they call the lender up, have them prepare a Good Faith Estimate and get an idea of exactly this internet lender was offering. The clients called from their cell phone and after a ½ an hour of being on hold finally spoke with someone who could NOT help them with their request.
As loan officers, Realtors, Title reps, there will always be someone out there cheaper…someone else can come in and undercut our offer by a few dollars. But the reason most of us have survived this market over the last few years isn’t price, its service. We can provide to our clients something more than a small discount. We can provide peace of mind and a quality of service. At the end of the day, I am here to help my clients. I truly believe I can offer something more than any website or online quote can.
95% of my business comes from referrals. My past clients are happy to refer me to their friends and family because they know I will do my best to help them. In this current market that means a lot.
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