Take advantage of $8K tax credit before it’s gone!

The $8,000 first-time buyer tax credit program ends in just four short months. That means buyers need to be CLOSED on their homes by NOVEMBER 30th in order to receive the tax break. What is the home buyer tax credit? It is a tax refund for 10% of a primary home’s purchase price (up to $8K). The amount not used on your 2009 tax return will be refunded directly to you. Who is eligible to receive the credit? First-time home buyers and those who have not owned a principal residence in the last three years prior to purchase. Do income limits apply? Yes. The full amount is given to individuals who make up to $75K and married couples who make up to $150K per year (adjusted gross annual income). The credit amount phases out between $75K and $95K for individuals; $150K and $170K for joint filers. If you want to take advantage of the home buyer tax credit, contact me today to discuss your plans. Keep in mind it’s typically 45-60 days to close on a traditional real estate transaction (short sales can take much longer). Any questions please, please, please do not assume! Call or email me. Most will qualify for this credit! Get the full details by contacting me directly!

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Mortgage Apps Fall – Can Foreclosures Can Make You Rich?

The weekly mortgage application index compiled by the Mortgage Bankers Association declined 15.8 percent to 514.4 on a seasonally adjusted basis last week compared to 611 the previous week.

On an unadjusted basis, the index fell 15.8 percent. Compared to the same week last year, applications were off 0.3 percent. The refinance index was down 23.3 percent, while the purchase index fell 3.5 percent.

There were fewer applications last week than in any week since November 2008.

Mortgage rates actually declined slightly after having risen steadily for almost a month.

• 30-year fixed-rate mortgages decreased to 5.50 percent from 5.57 percent;
• 15-year fixed-rate mortgages decreased to 4.99 percent from 5.10 percent;
• 1-year ARMs decreased to 6.54 percent from 6.75 percent.

I found an interesting article that might just perk your thoughts. IMO I believe if you have the funds to support multiple investment for 3-6 months…jump in and invest as heavy as you can afford.

The market at the moment is running scared. As soon as we can get the government to back out of the banking business and expose it’s hand on much it plans on saddling the U.S. citizens in debt more money will begin to trade hands.

Consider inflation is soon to be the next storm on the horizon. Soon the debt and credit strapped public, a high percentage, will be forced out of buying real estate. This will bring a new number into the rental market. If it pans out like that you’ll be poised to rent at a tidy profit and hold building equity. If it goes the other way and inflation miraculously avoids our economy then you’ll be positioned to sell if you so choose.

If you’ve accumulated these investments at pennies on the dollar tied to low interest rates it’s a no brainer jumping in and building your portfolio for a early retirement.

Can Buying Cheap Foreclosures Make You Rich?

Speculators are buying up an uncounted, but certainly significant percentage of homes for sale in cities where the meltdown has hit hardest.

Homes.com reports a 30- to 50-percent year-over-year increase in searches for homes in foreclosure-heavy states, including California, Michigan, and Florida. In these states, helping long-distance investors find and close on properties and close has become a burgeoning real estate specialty.

The investors run the gamut from international speculators seeking a house or two to venture capital firms that buy bundles of homes for 25 cents on the dollar — most in need of renovation and some with substantial tax liens.

Will these investments lead to riches? Possibly, if housing prices go back up and if investors are able to fix up and rent the properties out while they wait to sell, experts say.

As always chime in with any thoughts, questions, or concerns…your always welcome. Please feel free to utilize the Property Search Tools or contact me via the website

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How to Use the Tax Credit for Downpayments…

Short-term bridge loans are now available from a variety of lenders so that buyers can tap the benefits of the $8,000 Federal Housing Tax Credit for First-Time Home Buyers upfront. If your clients are eligible for the tax credit, these bridge loans will enable them to use the money for their down payment and closing costs with the credit as collateral. Consumers will have to pay the money back after they’ve filed their tax return and received a refund.

There are essentially four sources for this type of financing, and their terms can vary considerably.

1. State HFA Bridge Loans

As of early June 2009, 10 state Housing Finance Agencies offered tax-credit bridge loans, and more were planning to do so. The easiest way to learn whether one is offered in your state is to get your HFA’s phone number through a Housing Finance Agency list maintained by the National Council of State Housing Agencies (NCSHA). NCSHA also maintains a list of HFAs that already offer the bridge loans. The HFAs with loan programs already in place are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee.

If your state HFA offers the loans, you should be able to get more information about them on the agency’s Web site. Look for “tax credit advance loan” or some variant of that, or else look for information on the HFA’s regular mortgage program, which should include info on the tax-credit advance loan somewhere. Although each state HFA loan differs, here are some typical characteristics:

• You’ll need to make a minimum downpayment from your own funds, probably around $1,000.
• You’ll have to go through local lenders approved by the HFA to actually originate the loan, since HFAs are not originators.
• In some cases, the loans are interest-free; check with the state HFA to find out.
• The HFAs have set aside a limited amount of funds for the loans, so they tend to be made on a first-come, first-served basis.
• You’ll be expected to use HFA-backed financing for the mortgage on your home purchase. This financing typically comes with a below-market interest rate and usually requires borrowers to meet eligibility criteria. These criteria will vary greatly, but they often require borrowers to be first-timer buyers and meet income-eligibility requirements. For the bridge loans, there’s a good chance the criteria will be similar to what’s required for the tax credit.

Since the bridge loans are made in tandem with your HFA’s financing products, you apply for the loans when you apply with the HFA-approved lender for your mortgage financing. You should be able to find a list of approved lenders on the HFA’s Web site.

2. Local Government or Nonprofit Loans
If your state HFA doesn’t offer the loans, you can ask an HFA staff person to direct you to local nonprofits or state or local government agencies that do. If that person can’t help you, a good place to start a search is with a national nonprofit group called NeighborWorks, which maintains a list of more than 200 local affiliates that provide housing assistance. The loan programs for each of these affiliates differ, so you or your client will need to check with them on their underwriting standards and loan terms—and even on whether they make bridge loans repayable with the tax credit.

3. Local HFAs
Another source, if your state HFA can’t help you, might be the National Association of Local Housing Finance Agencies. Local HFAs are much like state HFAs but with jurisdictions limited to their locality. To learn whether there’s a local HFA in your area, call NALHFA at 202/367-1197.

4. FHA-approved Lenders
If you’re unable to identify a state or local HFA or other governmental agency or nonprofit to assist you, you can tap bridge-loan assistance if you work with a lender approved by the U.S. Department of Housing and Urban Development to originate FHA-backed loans. HUD maintains a database of FHA lenders on its Web site that’s searchable by a number of criteria including city, state, county, and service area.

In a difference with the assistance provided by state and local agencies or nonprofits, the bridge loans provided by private, for-profit FHA-approved lenders must be structured in the form of a personal loan or line of credit collateralized by the tax credit. The bridge loan can’t be structured as a second mortgage.

Also, although FHA allows you to use the bridge loan to cover your closing costs or to buy down your interest rate, you can use it for the down payment only after you’ve covered the 3.5 percent minimum that’s required on any FHA loan. Thus, you’ll have to come up with the 3.5 percent minimum down payment yourself or else tap another source of assistance for it. That can include gifts from family. Seller-funded down-payment programs are not permitted. HUD provides complete details in a May 29 Mortgagee Letter on “Using First-Time Homebuyer Tax Credits” (2009-15) that went to its approved lenders.

Since it’s the HUD-approved lender and not FHA itself that’s making the bridge loan, actual loan terms will vary. At a minimum, though, the bridge loan must meet certain restrictions, most of them imposed to weed out fraud or ensure borrowers aren’t getting in over their heads. These include:

• Loans can’t result in cash back to the borrower.
• The amount can’t exceed what’s needed for the downpayment, closing costs, and prepaid expenses.
• If there’s a monthly repayment, it must be included within the qualifying ratios and, when combined with the first mortgage, can’t exceed the borrower’s reasonable ability to pay.
• Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
• There can be no balloon payment required before 10 years.

Start with the Deepest Assistance First
Since state HFA bridge loans are typically allowed for as much of the downpayment as possible (up to the credit limit of $8,000), your client’s best bet is to start with the state HFA. If it doesn’t have a program in place, learn what you can from it about other state or local programs, including nonprofits. If these sources don’t pan out, your buyer can work with an FHA-approved lender. However, since HUD requires borrowers to put down a minimum of 3.5 percent, they can access bridge-loan assistance only for other upfront expenses such as closing costs, an interest-rate buy-down, or a portion of the downpayment above 3.5 percent.

As always chime in with any thoughts, questions, or concerns…your always welcome. Please feel free to utilize the Property Search Tools or contact me via the website

atlantahomesoldfast.com

Reel In First – Time Home Buyers

By AMY HOAK

A federal tax credit of up to $8,000 is nudging many Americans into buying a home for the first time, good news for those trying to sell one.

Still, selling a home isn’t easy in most markets today. To get the typical first-time buyer to bite and submit an offer, a house has to stand apart from the competition — and there’s a lot of it, including foreclosure homes that are selling at hefty discounts.

One big thing working in favor of the traditional seller: A lived-in, maintained home is easier for buyers to imagine themselves living in than a vacant foreclosure. That has great appeal for someone buying a home for the first time, for practical and financial reasons.

“First-time buyers are skeptical of buying homes that need improvement,” says Eric Mangan, a spokesman for ForSaleByOwner.com. “Sellers certainly don’t need to remodel the kitchen, but they want to make sure that their homes showcase very well.”

Andy Rash

While nearly half of brokers polled for a Coldwell Banker survey last year found that affordability was the No. 1 concern for first-time buyers, fully 81% said move-in conditions were very important to these buyers.

Only 7% said first-time buyers were looking to purchase fixer-upper homes that they could buy on the cheap and renovate.

Those feelings might be even stronger today as lenders generally require larger down payments, unless the mortgage is backed by the Federal Housing Administration. Higher down payments mean buyers have less cash left over for improvements, says Leslee MacKenzie, of Coldwell Banker Hickok & Boardman Realty in Burlington, Vt.

“They’re doing what they can to save for the down payment,” she says, and that will deplete some of the funds buyers would have for repairs.

While foreclosures that are in severe disrepair can be a huge turnoff for a first-time buyer, some banks will make improvements to their foreclosed properties, fixing them up so that they meet FHA standards and a buyer’s needs, says Chuck Whitehead, of Coldwell Banker Associated Brokers in Southern California. These fixed-up, bank-owned homes can be stiff competition for the rest of the for-sale inventory.

Never fear, there are still ways to outshine other homes on the market. Assuming you’ve priced the home correctly, here are five ways to lure a first-time buyer:

Maintain and stage

A home that has been taken care of throughout the years will offer a stark contrast to a vacant, empty foreclosure.

“If someone is living there, the landscaping is not dead,” says Mr. Whitehead. “There is warmth in the home,” and that can go a long way in selling a property.

As with any home, a fresh coat of paint, decluttering and the removal of unpleasant odors can go a long way to making a good first impression. But be careful not to over-improve the home; the investment might not be worth the cost.

Offer help with closing costs

And offer early. Whether you put it up front in the marketing material or in the listing, this could be an extra motivator to reel in a buyer.

Generally, there’s a good chance buyers will ask for help with closing costs anyway, but it might help to offer it at the beginning, says Heather Joubran, an agent with Re/Max Central Realty in Lake Mary, Fla.

If rising mortgage rates have your buyer spooked, consider paying the points to bring the interest rate down, says Mr. Mangan. But consider a buyer’s timeline for staying in the home before deciding if this is the most effective way to help; paying points generally makes sense for those staying in a home for more than a few years.

Offer a home warranty

First-time buyers are often coming from a rental, and they are used to calling a landlord when there’s a problem. To help them more easily transition into homeownership, provide them with a warranty that covers major systems, Ms. Joubran suggests.

Offer mortgage protection

In some cases, it might make sense to address buyers’ fears by purchasing insurance for them, so they can keep up with their mortgage even after a job loss. Coldwell Banker has such a program through its parent company, Realogy.

The plan will make several months of mortgage payments in the event the buyer becomes unemployed.

“There are people with secure jobs who are still nervous,” says Ms. MacKenzie. “This can give them just a little more comfort.”

Don’t snub low offers

Buyers know prices have fallen, so they’re being aggressive in their offers — sometimes extremely aggressive. But even if they come in with a shocking lowball offer, don’t scoff at it. Understand where they’re coming from. Try to compromise.

“My rule of thumb is every offer deserves a counteroffer,” says Ms. Joubran. “At least counter them back. It gets the conversation going.”

If they liked the home enough to make an offer, maybe you can arrive at a mutually acceptable price, she says.

Chime in or visit me with any questions at atlantahomesoldfast.com -Todd

Reverse Mortgages

Sifting through the financial news this morning it dawned on me some of the elderly might have been hurt in more ways than just the value of their homes during this economic downturn. I’d like to post a link to an article in the Wall Street Journal. It is a must read article.

Reverse mortgages can be a lifeline for seniors that have lots of equity but limited incomes. I as a Realtor like the aspect of being able to use a reverse mortgage to upgrade to a new primary residence and not have any monthly payments. Don’t be confused with what I like and what could and would be most beneficial to you in living life on your terms!

If you need help or have questions concerning Reverse Mortgages please contact me and I’ll get you the answers and information your looking for.

Please chime in or contact me via the website atlantahomesoldfast.com

Have a great day!

http://online.wsj.com/article/SB124459828244500783.html