Extending the First-Time Home Buyer Tax Credit, due to expire at the end of November, is high on the Democratic Congressional to-do list, legislative aides said.
After last Wednesday's meeting with President Obama and House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) released a statement that the government should, "continue efforts to strengthen the housing market by extending the home buyer tax credit."
Mark Zandi, chief economist at Moody's Economy.com, who is a consultant to Democrats in the administration and Congress, is advocating extending the credit through August and making it available to all home buyers. He said failure to extend the credit just as more foreclosures enter the market will push housing prices down.
Also, the House is expected to pass legislation to extend the credit through 2010 for people who have been out of the country in the military, intelligence, or foreign services.
Source: The New York Times
Monday, October 26, 2009
Monday, September 14, 2009
Deadline is coming soon!!!
If you are a first time home buyer, please do not wait until the last minute to buy. NOW is the time to buy because you must close the transaction by November 30 in order to take advantage of the $8000 tax credit.
“Should I Buy a Home Now, or Wait?”
Will prices get better if I wait? Will mortgage rates be lowerI if I wait? Will I have a wider choice of homes to buy if I wait?
All good questions. They deserve good answers.
Sept. 1, 2009
(1) Will home prices get better if I wait?
The average home price in the MLS of Greater Cincinnati has fallen by 13 % over the past year. As the number of homes for sale shrinks (see question #3 below), that will create pressure for higher home prices. It may not happen over night, but it will happen. In a recent Baylor University survey, 8 of 10 economists agreed home prices will rise in the next 5 years. So will rental costs. Do you want to capture the advantage of equity build-up…or collect “throw-away” rent receipts?
(2) Will mortgage rates be lower if I wait?
Today’s mortgage rates are near 50-year lows. They are at bargain levels. But if you’ve never
bought a home before, you just don’t realize the “borrowing power” of today’s low rates (unless your parents, friends, or other relatives told you). You don’t have to pay 15% for a home loan, as you did in the early 1980s, or 7%-to-8% in the 1970s and 1990s. Today they’re between 5-6%. That’s all. But when inflation returns, you can “kiss goodbye” mortgage rates under 7%.
(3) Will I have a wider choice of homes to buy if I wait?
There are currently 14,182 homes for sale in the MLS of Greater Cincinnati. One year ago that
number was 16,680. Two years ago it was 17,880. The trend in the number of homes available is
definitely downward. The lower the inventory, the greater pressure for higher prices. So, should you wait for a wider choice? Fewer homes on the market = higher selling prices. So, do you want to buy low (now), or buy higher (later)?
Bonus Question:
Is there any particular reason, as a First-Time Buyer, why I should buy now?
Yes. Until Nov. 30, 2009, first-time buyers are eligible for a “federal tax credit” up to $8,000 on the purchase of a home that is closed by that date. Pure credit, not repayable. Anyone who hasn’t owned a home in the past 3 years may be eligible, if they meet income limits -- single buyers, $75,000 a year; married couples $150,000. The credit decreases for single buyers earning between $75,000 and $95,000, and between $150,000 and $170,000 for home buyers filing jointly. If you finance your home through FHA, you may use the tax credit money to help pay for down payment or closing costs. You may also be eligible for further tax credits through the Ohio Housing Finance Agency. If you’ve been sitting on the fence, now is the time to get off that fence. Arm yourself with the facts, and join the 75 million homeowners nationwide who enjoy the benefits of home ownership (equity build-up, home appreciation, tax advantages, and pride of ownership).
Call your REALTOR. He or she knows (a) local market home inventories, (b) homes values,
(c) lending programs, (d) first-time homebuyers tax credit program and (e) everything else to
help you make a housing choice…TODAY. It’s time to…Get Off the Fence.
“Should I Buy a Home Now, or Wait?”
Will prices get better if I wait? Will mortgage rates be lowerI if I wait? Will I have a wider choice of homes to buy if I wait?
All good questions. They deserve good answers.
Sept. 1, 2009
(1) Will home prices get better if I wait?
The average home price in the MLS of Greater Cincinnati has fallen by 13 % over the past year. As the number of homes for sale shrinks (see question #3 below), that will create pressure for higher home prices. It may not happen over night, but it will happen. In a recent Baylor University survey, 8 of 10 economists agreed home prices will rise in the next 5 years. So will rental costs. Do you want to capture the advantage of equity build-up…or collect “throw-away” rent receipts?
(2) Will mortgage rates be lower if I wait?
Today’s mortgage rates are near 50-year lows. They are at bargain levels. But if you’ve never
bought a home before, you just don’t realize the “borrowing power” of today’s low rates (unless your parents, friends, or other relatives told you). You don’t have to pay 15% for a home loan, as you did in the early 1980s, or 7%-to-8% in the 1970s and 1990s. Today they’re between 5-6%. That’s all. But when inflation returns, you can “kiss goodbye” mortgage rates under 7%.
(3) Will I have a wider choice of homes to buy if I wait?
There are currently 14,182 homes for sale in the MLS of Greater Cincinnati. One year ago that
number was 16,680. Two years ago it was 17,880. The trend in the number of homes available is
definitely downward. The lower the inventory, the greater pressure for higher prices. So, should you wait for a wider choice? Fewer homes on the market = higher selling prices. So, do you want to buy low (now), or buy higher (later)?
Bonus Question:
Is there any particular reason, as a First-Time Buyer, why I should buy now?
Yes. Until Nov. 30, 2009, first-time buyers are eligible for a “federal tax credit” up to $8,000 on the purchase of a home that is closed by that date. Pure credit, not repayable. Anyone who hasn’t owned a home in the past 3 years may be eligible, if they meet income limits -- single buyers, $75,000 a year; married couples $150,000. The credit decreases for single buyers earning between $75,000 and $95,000, and between $150,000 and $170,000 for home buyers filing jointly. If you finance your home through FHA, you may use the tax credit money to help pay for down payment or closing costs. You may also be eligible for further tax credits through the Ohio Housing Finance Agency. If you’ve been sitting on the fence, now is the time to get off that fence. Arm yourself with the facts, and join the 75 million homeowners nationwide who enjoy the benefits of home ownership (equity build-up, home appreciation, tax advantages, and pride of ownership).
Call your REALTOR. He or she knows (a) local market home inventories, (b) homes values,
(c) lending programs, (d) first-time homebuyers tax credit program and (e) everything else to
help you make a housing choice…TODAY. It’s time to…Get Off the Fence.
Friday, July 31, 2009
Tuesday, June 9, 2009
$8000 First-Time Home Buyer Tax Credit Can Be Used on Closing Costs
~ HUD $8,000 First-Time Home Buyer Tax Credit Can Be Used on Closing Costs
FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.
Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5%.
The loans can't be used to cover the minimum 3.5% downpayment.
In addition, the Ohio Housing Finance Agency has developed its own tax credit bridge loan programs, so Ohio home buyers can monetize the tax credit upfront to cover all or part of their downpayment.
FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.
Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5%.
The loans can't be used to cover the minimum 3.5% downpayment.
In addition, the Ohio Housing Finance Agency has developed its own tax credit bridge loan programs, so Ohio home buyers can monetize the tax credit upfront to cover all or part of their downpayment.
Tuesday, March 10, 2009
Some "Real World Examples"
What if I purchase later this year but can't get to the settlement before December 1?
The credit is available for purchases before Dec. 1, 2009. A home is considered as "purchased" when all events have occurred that transfer the title from the seller to the new purchase. Thus, closings must occur prior to December 1 to be eligible for the credit.
I haven't even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit?
You will have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1 and December 1, 2009 can treat the purchase as if if had occured on December 31, 2008. Thus, they can claim the credit on their 2008 tax treturn that is due on April 15, 2009. You have three options:
1. If you buy between January 1 and April 15, you can claim the credit on the 2008 return due April 15.
2. You can extend the 2008 income-tax filing as late as October 15, 2009. IRS automatically grants extensions, but you must file!
3. If you've file your 2008 return before the purchase of a home, you can file an amended 2008 tax return on Form 1040X.
Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return (due April 15, 2010).
I know there is no repayment requirement for the $8,000 credit. Will I ever have to repay any of the credit back to the government?
One situation does require a recapture payment back to the government,. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply.
The credit is available for purchases before Dec. 1, 2009. A home is considered as "purchased" when all events have occurred that transfer the title from the seller to the new purchase. Thus, closings must occur prior to December 1 to be eligible for the credit.
I haven't even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit?
You will have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1 and December 1, 2009 can treat the purchase as if if had occured on December 31, 2008. Thus, they can claim the credit on their 2008 tax treturn that is due on April 15, 2009. You have three options:
1. If you buy between January 1 and April 15, you can claim the credit on the 2008 return due April 15.
2. You can extend the 2008 income-tax filing as late as October 15, 2009. IRS automatically grants extensions, but you must file!
3. If you've file your 2008 return before the purchase of a home, you can file an amended 2008 tax return on Form 1040X.
Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return (due April 15, 2010).
I know there is no repayment requirement for the $8,000 credit. Will I ever have to repay any of the credit back to the government?
One situation does require a recapture payment back to the government,. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply.
Question and Answers
How do I apply for credit?
There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov
So, I can't use the credit amount as part of my downpayment?
No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the process.
So there's no way to get any cash flow benefits before I file my tax return?
Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit may modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments.
There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov
So, I can't use the credit amount as part of my downpayment?
No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the process.
So there's no way to get any cash flow benefits before I file my tax return?
Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit may modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments.
Tuesday, March 3, 2009
Good Articles to Read Regarding Homeowner Stimulus Package
The Homeowner Affordability and Stability Plan is part of the President's broad, comprehensive strategy to get the economomy back on track. The plan will help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. To read more about the Homeowner Stimulus Plan read the following articles:
http://whitehouse.gov blog - Hope for Homeowners
http://WashingtonPost.com: Homeowner Affordability and Stability Plan on 02.08.2009
http://www.federalhousingtaxcredit.com
http://whitehouse.gov blog - Hope for Homeowners
http://WashingtonPost.com: Homeowner Affordability and Stability Plan on 02.08.2009
http://www.federalhousingtaxcredit.com
Subscribe to:
Posts (Atom)
