Highlights of the updated First Time Home Buyer Federal Tax Credit included in the recently signed American Recovery & Reinvestment Act of 2009. See Claim8000.com for more details and FAQ’s about the tax credit.
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The First Time Home Buyers Tax Credit Boosts Sales, Not Economy

The first time home buyer’s tax credit, which expires November 30, 2009, has been boosting U.S. summer home sales. The question is: can it last? With budget cuts, layoffs and an all-around depressed economy, there are some questions as to whether this jump in home sales will last and, too, whether the people buying homes will be able to keep them.

In July, sales jumped a record 7.2 per cent, with one out of every three home buyers being a first time home owner. 7.2 per cent might not seem like a lot, but when you realize that this equals 350,000 more home buyers in July than in June, it’s clear that something is spurring on real estate consumers. With a third of home sales being to first-time home buyers, it’s clear that the tax credit bears some responsibility for the situation.

Normally improved home sales would be cause for rejoicing. “Sales are up! The economy’s turning around! Yay!” Indeed, we all hope that we will soon see some relief from the recession. However, it would be unwise to use this particular instance as “evidence” of a financial turnaround for the U.S. This brief burst of prosperity may subside once the first-time home buyer’s tax credit expires at the end of November.

Many buyers are taking advantage of the huge dips in prices for homes, hoping to see gains in equity. Foreclosure homes are especially popular, as buyers are getting homes at a fraction of the price, even in traditionally expensive markets like San Diego and Orlando.

The national median sales price is now 8,400, nearly 0,000 below what it was in the early part of the decade. This can offer home buyers an exceptional value, but means nothing if the home owners are unable to hold onto their assets.

Job losses are threatening the ordinary home owner even as they and the housing market bust have caused the spectacular drop in home prices. Even today, with a plethora of information on how to avoid home owner scams and how to make sure you can really afford your home, people are still losing their homes due to job cuts, job losses and just plain bad budgeting.

Despite the spike in home purchases, it would be unwise to take this as a sign that the recession is over or that the economy is gaining equilibrium. It remains to be seen whether the year’s spike in home sales will continue on into 2010. If so, perhaps it is indicative of a positive change in the nation’s finances, but there are definitely some doubts in that regard.

First Time Home Buyers


Image by dsb nola
My friends April and Trey have just bought the house behind them. They’re exactly what New Orleans needs. Bright twentysomethings with a big fat mortgage. New investors in the city of New Orleans. It is a young person’s game.

Their house is a double, by the way, so anyone looking for a decent Broadmoor apartment … I can hook you up.

And those of you New Orleanians (or, perversely, wannabes from elsewhere) crazy enough to get in on the action, April and Trey used our real estate agent, Barbara. She’s the lovely two-headed dog you’ll need to make it in the junkyard. Seriously. I can hook you up.

My services are free of charge.

,000 Tax Credit for First Time Home Buyers

Some people have been asking me about the recent ,000 tax credit for first time home buyers and I thought I should address it here. If you are buying or will buy a home in 2009 as a first time home buyer (see below for definition), you will be eligible for an ,000 tax credit that you will not have to pay back. This is part of Obama’s Recovery and Reinvestment Act and will replace the previous ,500 credit that was previously in effect. So below are some of the qualifications necessary:

1. First Time Home Buyer Purchasing in 2009
A first time home buyer is defined as a someone or a couple who has not owned a home in the past three years. The purchase, or recording date needs to be between or on January 1, 2009 to December 31, 2009. If you’re not sure about the dates, contact your real estate professional, if you have one, or you can always contact me.

2. Primary Residence for 36 Months
The home you buy must qualify as a primary residence for 36 months following the purchase date or else the credit must be repayed.

3. Income Under ,000 for individuals and 0,000 for couples
Your taxable income must be under ,000 if you file as an individual or 0,000 if you file as a couple. You are still eligible for the tax credit if your income is higher than that but it phases out quickly to ,000 over the limit.

These are just the basic rules for the law. If you need the form, you can download it here. Also, I’m not a CPA or tax expert so don’t rely on just this information. I have a really great tax planner if you need tax advice as well.

realestatemarketingthisweek.com – First Time Home Buyer should use a Mortgage Planning Expert – Part 8 – Credit scores now are a major factor with interest rates. You see the liars up on the internet with interest rates being at 4.625% and all this kind of hocus pocus, its not true. You are never going to qualify for that rate today. They are going to lie to you, once you sign and see the fine print you are going to realize that it is a ridiculous idea to pay that amount of money in fees. Credit scores have to be significantly higher than they used to, but again I have to tell you, its my opinions that a 70% no doc loan with someone who has a 720 or higher credit score I believe is a good loan. I personally believe that at some point it will be brought back. I am not arguing with that, with a good FICO score I can agree with a 20% down for a stated income loan. People are encouraged through our tax system to write off all of their expenses and so often we have small business people who really are making money but because they take advantage of our tax system they are not able to get a loan. They cant qualify based upon their income. In a lot of cases yes, but once again I definitely want to point his out just because someone is self employed and owns a small business and they do write everything off, that does not mean that they will not qualify. They may have been told now that they have to go stated income because of tax returns, but most people, the small business …

Question by ready: How do I choose a good first time home buyers program?
I will be buying my first home in september I live in atlanta, ga. My credit score right now is about a 720. What is a good first time home buyers program. I hear there is some with 0 down and closing cost paid…please give me your insight.

Best answer:

Answer by teran_realtor
One that you qualify for.

Know better? Leave your own answer in the comments!

realestatemarketingthisweek.com – Interest rates hit bottom, first time home buyers should buy before the prices go back up – Part 1 – We have a special guest back in the studio today. Dan Havey has been a great promoter for Velocity Financial . Dan and I have been working together for about 14 years now. Dan has brought with him some really, really interesting facts and figures for people who are wondering whats happening, wondering if we are at the bottom of the market, wondering how much further we are going to have to go. We are going to talk about lots of different things like that. Hes got some really good information, in my opinion some good stuff, some good solid data to make some good decisions about whether or not you should or should not buy right now. So, Today was the official day that President Obamas Plan was rolled out. It was designed to help some 8 to 9 million homeowners, responsibly homeowners they called them, people who purchased homes at the peak of the real estate market with 20% or more down. The plan is just so darned convoluted, it is very complicated, people are calling wondering whats real, whats not real, whats going to happen. The bottom line is about 19% of all the homes were financed utilizing Fanny Mae or Freddie Mac financing. People, who have Fanny Mae or Freddie Mac loans, these conventional type loans, that put 20% down, that used full documentation, which means tax returns to qualify for the loan, those are the only people that are …

Tax Credit Available For First Time Home Buyers

Amid the economic upheaval, there is good news for first-time home buyers – a tax credit of up to ,500. Even better – the definition of first-time home buyers includes those who have not owned a principal residence in the three year period prior to purchasing a qualifying home.

The tax credit, established through the Housing and Economic Recovery Act of 2008, is available only to first-time home buyers and only for homes purchased on or before April 9, 2008 and before July 1, 2009. Any home that will be used as a principal residence qualifies, including single family detached homes, townhomes, condominiums, mobile homes, and houseboats. New construction is also eligible, as long as possession or occupancy occurs within the parameters defined by the law.

For the purposes of this law, a first-time home buyer is defined as someone who has not owned a principal residence during the three years prior to the purchase of the qualified property. For married taxpayers, neither individual may have owned a principal residence in the previous years. A buyer will not be disqualified from the tax credit if they own a vacation home or rental property not used as their principal residence.

Single taxpayers with incomes up to ,000 and married couples with incomes up to 0,000 qualify for the full tax credit. Eligibility is determined based on modified adjusted gross income. Partial credit may be available for those with higher incomes; however, individuals with a modified adjusted gross income exceeding ,000, (or 0,000 for married couples filing jointly), will be ineligible for the tax credit.

The tax credit is equal to 10% of the qualified home purchase price, but is capped at ,500; for homes purchased for less than ,000, the credit will be 10% of the purchase price.
There are no special forms to fill out and no pre-approval necessary. The credit is easily claimed on the federal income tax return. Plus, the credit can be claimed on the 2008 return for a home purchased in 2009. If the tax credit exceeds the taxpayer’s outstanding liability for the year, the taxpayer will receive a check from the government.

The credit is like an interest-free loan, and it must be repaid to the government over a 15-year period. Payments do not have to begin until two years after the credit is claimed. If the home is sold before the credit is repaid, the outstanding amount will be paid from profits on the sale. If there is insufficient profit to repay the credit, the remaining amount will be forgiven.

For first-time home buyers (those who are truly new to the market and those who have not owned a principal residence in at least three years), this tax credit can make it easier to transition into home ownership. Combined with housing inventories increasing, prices decreasing, and mortgage rates dropping even lower, this tax credit may just make the difference in making home ownership a reality.

This article is informative only, based on information available at time of publication, and is not intended to provide tax or legal advice. Please be sure to consult with a tax advisor or legal professional about your particular situation prior to making any decisions or taking any action.

Only in Byron Bay, Lo Doc Loans and Tax, Buyer?s Market

Only in Byron Bay

I loved this story of a property in the Byron Hinterland being sold in the $mil and a half region. It seems the potential new owners discussed the purchase with their psychic Geomancer – this is like a Feng Shui expert. They were told that the vendors were not yet ready to leave this property and that they should wait for a more auspicious time. When told this news, the vendors did what any sensible Byron property owner would do – called in their personal shaman for a full psychic cleanse and sage smudging. Negotiations are now proceeding smoothly.

Lo Doc Loans and Tax

For some time now the ATO have been rattling their swords over Lo doc loans. It seems – Shock! Horror! – some people have been exaggerating their declared income when going for a loan while minimizing it when filing with the tax Department. It is understandable, I suppose, that the ATO would wish to tax the Great Australian Tax Payer at the higher figure if given the chance and this, apparently, is what they intend to do.

A recent story from Crikey.com states the commissioner of the ATO Michael D’Ascenzo is saying he knows that people are fibbing on their Lo Doc Loan declarations and declares that if any are caught during an audit then the higher figure will be what is the taxable amount. Of course brokers have been made out to be the baddies in this situation as well but the real story here is this is just another indication of the coming tightening of monetary policy. If Paul Keating was still around he would say this is the “credit squeeze we have to have!”

Put out the “Fire Sales”

In a similar vein, our local member Don Page is behind a move to stop Mortgagee-in-Possession auctions going on as “Fire Sales”. The banks and agents are only interested in getting back the mortgage debt when someone defaults on their loan with no interest in helping the vendor retain as much equity as possible. If the new law is accepted it means that if a house is sold under value, the Mortgagee can be held accountable for the balance and all effort must be made to properly promote and list the property (not just ring up a mate and do a deal!)

Buyer’s Market

Domain.com pointed out that last weekend there were twice as many properties going to auction in Sydney than normal – about 1300 – nearly double the previous average of 590. However clearance rates have sunk to 63%, which is the lowest since August 2005. That is a statistic verifying my intuition that we have quickly turned from what was expected to be a boomer season for agents into a bit of a bear market. The future – no one will predict but I feel the sentiment is equal between those saying we will have a soft 6 – 12 months to the doom and gloomers saying we are in for an extended rough patch.

Resources:

www.byronpropertysearch.com.au

www.realestate.com.au