Thursday, December 10, 2009
Monday, November 30, 2009
Friday, November 6, 2009
The New and improved Tax Credit
It's finally here:
Congress just passed an expanded version of the $8,000 first time home buyer tax credit that was set to expire on November 30.
Although the tax credit remains at $8,000 for home buyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up home buyers did not qualify. Consider these three examples:
Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.
Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. In other words If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010. It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.
The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. This means that more people will qualify for the credit – especially in parts of the country with higher costs of living. This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.
There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
• The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others
• If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit.)
• The credit applies even if you have co-signers on your mortgage loan
For more details contact me directly or visit my website at:
www.markmoyes.com/taxcredit.html
Congress just passed an expanded version of the $8,000 first time home buyer tax credit that was set to expire on November 30.
Although the tax credit remains at $8,000 for home buyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up home buyers did not qualify. Consider these three examples:
Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.
Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.
Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. In other words If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010. It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.
The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. This means that more people will qualify for the credit – especially in parts of the country with higher costs of living. This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.
There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
• The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others
• If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit.)
• The credit applies even if you have co-signers on your mortgage loan
For more details contact me directly or visit my website at:
www.markmoyes.com/taxcredit.html
Thursday, October 29, 2009
Monday, October 19, 2009
Monday, October 12, 2009
Monday, October 12, 2009
Hi and welcome to another edition of Mark’s Mortgage Minute.
Mortgage Planners are the elite athletes of the Lending industry and I have a responsibility to provide you with current, accurate information that’s designed to help you gain the winning edge.
Economic indicators show we are expecting to see a large amount of foreclosures early this next year which may hinder the housing recovery. Last Thursday on Capitol Hill FHA commissioner David H. Stevens had acknowledged the possibility of 20% of FHA insured loans last year and 24% from 2007 are facing serious problems including possible foreclosure. Some analysts believe F.H.A. will need a federal bailout to survive. Commissioner, Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.
Believe it or not, with F.H.A under this kind of pressure, we may see lending guidelines get a little bit tighter. The first change we may see could be to increase the borrower’s credit score requirements. There is also the possibility F.H.A. would require more than the current 3.5% standard.
On a positive note; Because of recent talks of our improved economy we should see more homes being listed by those homeowners who aren’t currently in a distressed situation. To be specific we’ve already seen an increase in sales for homes below $250,000. What that means is the $8,000 first time buyer tax credit is working.
It is believed by many the current $8,000 Tax credit for first time buyers will be extended. Until something official comes through the current tax credit is set to expire on November 30th, which happens to be 49 days from today. However there is one very important variable to take into consideration. Thanksgiving falls on Thursday November 26th. Most if not all Banks will be closed from Thursday the 26th – to possibly Monday the 30th. That is 5 days that could be cut off for buyers to receive the tax credit. In reality we need to prepare our clients to plan on closing on their homes no later than Tuesday the 24th, or Wednesday the 25th.
Even with all of the industry turmoil my team and I are still able to close loans as fast as 7 days. We’ve worked very hard to create a system that’s designed to close your deal fast and to close it clean while giving your clients the proper advice.
Thanks for your time, I look forward to hearing your Thoughts
Mark
Mortgage Planners are the elite athletes of the Lending industry and I have a responsibility to provide you with current, accurate information that’s designed to help you gain the winning edge.
Economic indicators show we are expecting to see a large amount of foreclosures early this next year which may hinder the housing recovery. Last Thursday on Capitol Hill FHA commissioner David H. Stevens had acknowledged the possibility of 20% of FHA insured loans last year and 24% from 2007 are facing serious problems including possible foreclosure. Some analysts believe F.H.A. will need a federal bailout to survive. Commissioner, Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.
Believe it or not, with F.H.A under this kind of pressure, we may see lending guidelines get a little bit tighter. The first change we may see could be to increase the borrower’s credit score requirements. There is also the possibility F.H.A. would require more than the current 3.5% standard.
On a positive note; Because of recent talks of our improved economy we should see more homes being listed by those homeowners who aren’t currently in a distressed situation. To be specific we’ve already seen an increase in sales for homes below $250,000. What that means is the $8,000 first time buyer tax credit is working.
It is believed by many the current $8,000 Tax credit for first time buyers will be extended. Until something official comes through the current tax credit is set to expire on November 30th, which happens to be 49 days from today. However there is one very important variable to take into consideration. Thanksgiving falls on Thursday November 26th. Most if not all Banks will be closed from Thursday the 26th – to possibly Monday the 30th. That is 5 days that could be cut off for buyers to receive the tax credit. In reality we need to prepare our clients to plan on closing on their homes no later than Tuesday the 24th, or Wednesday the 25th.
Even with all of the industry turmoil my team and I are still able to close loans as fast as 7 days. We’ve worked very hard to create a system that’s designed to close your deal fast and to close it clean while giving your clients the proper advice.
Thanks for your time, I look forward to hearing your Thoughts
Mark
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