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  1. Low Mortgage Rates and Tax Credits Indicate Blooming Spring 2010 Housing Market

    1 By on March 19, 2010

    blooms

    As we get ready to say our final goodbyes to the winter of 2010 when the clock strikes midnight tonight, welcoming in March 20, 2010 and the first day of spring, let us hope spring 2010 holds true to the significance of what spring signifies for us.

    This spring, if you haven’t been paying attention to the climate in the national housing market, existing home sales fell 7.20 percent to a seven-month low in January 2010. This decrease follows on the heels of December 2009′s decrease of 16.20 percent, which is the largest decline on record. January 2010′s decline was the largest decrease in almost 11 years.

    While many housing experts were expecting January’s existing home sales to be slow, this came as a surprise, and is raising serious concerns about the stability of the housing market recovery and the economic recovery as a whole.

    This is the perfect time to be a home buyer in America. You may be able to make a serious argument this is the best time in American history to be purchasing a home.

    Current mortgage interest rates for 30-year fixed mortgages are still in the mid to high 4 percent range and 5/1 adjustable rate mortgage interest rates are still hovering in the high 3 to low 4 percent range. The federal government’s tax credit incentive now eligible to first time home buyers, and also existing home owners to purchase a home, is still in effect until April 30, 2010 for a signed purchase contract. Home prices are still at incredibly affordable levels. The federal government also has a $1,500.00 (up to 30 percent of the cost) tax credit available until December 31, 2010, for energy improvements. The criteria of eligibility for this credit is very attractive and covers hot water tanks, windows, doors, roofing, furnace, air conditioning units etc. (see http://www.energystar.gov/index.cfm?c=tax_credits.tx_index)

    If you are a first-time home-buyer, you could collect your $8,000 tax credit then use $5,000 of the credit to purchase eligible energy efficient improvements, and receive an additional $1500 cash back from the government for improving your home. You can parlay the 8k into 5k in improvements and still end up with $4,500 in cash in your pocket, for a total credit of $9,500, not too mention the possible increase in the value of your home due to the improvement. This current environment available to home buyers makes it difficult to understand why existing home sales fell so much.

    The numbers for February existing home sales should be released sometime next week. Hopefully they will show some improvements. From here through the spring and summer months of 2010, if you live in or near the East Coast - whether the Northeast, Mid Atlantic or Southeast states - you understand what a very cold, and basically ugly winter we all just finished enduring. Hopefully, most perspective home buyers were just hibernating due to the weather, and the birth of this new spring season will get everyone out and about, looking to purchase the next home of their dreams.

    Spring is here,  meaning new hope, new beginnings, and better days for the mortgage industry. Somme incredible and historic low mortgage interest rates and federal tax credit expire very shortly. If you are considering a home purchase, now is definitely the time to stop thinking about thinking about it and to start doing something about it.

    Category: First Time Home Buyer, Mortgage Rates

  2. Home Buyer Tax Credit 2010: What First-Time Home Buyers Need To Know?

    By on March 10, 2010

    The home buyer tax credit deadline is almost up. If you’re a home buyer interested in taking advantage of the tax credit you may find some useful answers to your questions here.

    If I’m qualified for the tax credit and buy a home in 2009 (or 2010), can I apply the tax credit against my 2008 (or 2009) tax return?
    Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 (or 2010) as if the purchase occurred on December 31, 2008 (or if in 2010, December 31, 2009). This means that the previous year’s income limit (MAGI) applies and the election accelerates when the credit can be claimed. A benefit of this election is that a home buyer in 2009 or 2010 will know their prior year MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
    Taxpayers buying a home who wish to claim it on their prior year tax return, but who have already submitted their tax return to the IRS, may file an amended return claiming the tax credit using Form 1040X. You should consult with a tax professional to determine how to arrange this.

    For a home purchase in 2009 or 2010, can I choose whether to treat the purchase as occurring in the prior or present year, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in the present year and a larger credit would be available using the prior year MAGI amounts, then you can choose the year that yields the largest credit amount

    How can two unmarried buyers allocate the tax credit if one qualifies for the $8,000 first-time home buyer tax credit and the other qualifies for the $6,500 repeat home buyer credit?
    The buyers can allocate the tax credit in any reasonable manner, provided neither claims a tax credit higher than the one they qualify for and the home purchase does not yield a total of more than $8,000 in tax credits. For example, the repeat home-buyer could claim $6,500 and the first-time home buyer could claim $1,500. Alternatively, both buyers could claim a $4,000 tax credit.

    If a single person (Taxpayer A) qualifies as a first-time home buyer at the time he/she purchases a home with someone (Taxpayer B) that is not a first-time home buyer and then later that year they marry each other, is the credit still allowed?
    A. Eligibility for the first-time home buyer tax credit is determined on the date of purchase. If Taxpayer A, a first-time home buyer, buys a house and then later that year marries Taxpayer B, not a first-time home buyer, the credit is allowable to Taxpayer A. Taxpayer A may take the maximum credit.

    Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?
    A. Yes. Taxpayer B is not a first-time home buyer and cannot claim any portion of the credit, but A may claim the entire credit, if the home was purchased as Taxpayer A’s primary residence

    It is not often in life we find ourselves afforded with a second-chance opportunity, considering the massive costs involved with this legislation, this is the last chance to take advantage of this tax credit if you qualify. The Senate, The House of Representatives nor the President of The United States of America may not allow any further extensions to this program once it expires in after April 30, 2010.

    If you qualify and would like to take advantage of this once in a life time opportunity, check our low current mortgage rates and call us today at 877-868-2503.

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    Category: First Time Home Buyer

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