First-time Home Buyer Tax Credit!

If you are a first time home buyer or have not owned a home in the last 3 years and you purchase a home this year of 2009 . . . then it will be very likely that you will qualify for the $8,000 Tax Incentive which is almost FREE money that you won't have to repay unless you resale your home in the next 3 years! Home buyers . . . this is your year! I have been saying this since January of last year, but no one would have guessed that the Government would have stepped up to even make this even sweeter!

5 Tips for Homebuyers Seeking a Mortgage

Here’s a warning: Nervous lenders have tough new rules and are paperwork crazy." Borrowers are going to have to prove they are the borrower they say they are," says Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.Gumbinger says homebuyers should consider these things before they apply for a loan.

1. Down payments are critical. Expect to put down at least 10 percent for a “conforming loan” – a mortgage that Fannie Mae and Freddie Mac will purchase.

2. Credit scores count. A 720 on the 850-point FICO rating scale will get access to the best rates. Rich Bira, branch manager of FCM Direct Lender in Chicago, says: "A score between 720 and 739 gets 0.125 percent added to the rate, a score between 700 and 719 gets 0.375 percent added to the rate, and a score between 680 and 699 gets 0.5 percent added to the rate.”

3. Consider VA and FHA. Borrowers without down payments or with less than stellar credit scores should consider these government-insured loans offered through the Federal Housing Administration of the Veterans Administration.

4. Unearth the records. Before applying, organize tax, banking and other records that prove income, savings and debts. Expect to be patient about what may seem to be endless requests for information.

5. Get rid of debts. Limit debts, including what to pay for the mortgage, to less than 43 percent of gross income is important.

Chicago Tribune, Mary Umberger (02/15/09)

What's In the Foreclosure Prevention Plan

The Obama administration yesterday released its long-awaited plan to stem foreclosures. It's organized into three categories:

1.) Help for home owners making their payments but at risk of default and foreclosure. Home owners with a Fannie Mae or Freddie Mac loan would be eligible to refinance as long as their mortgage doesn't exceed 105 percent of the home's current market value. Currently owners need to have at least 20 percent equity. Potential impact: 4-5 million households.

2.) Help for home owners already in default and in need of loan modification. For lenders that voluntarily agree to lower a borrower's payment so that it makes up no more than 38 percent of the borrower's income, the government would share the cost of lowering the mortgage burden to 31 percent of income. Incentives to lenders to participate include a $1,000 payment. Borrowers can receive up to $1,000 as an incentive to stay current on their new mortgage. Still in the works is a proposed provision that would allow bankruptcy judges to require loan modification (known as a cramdown) as part of a household's restructuring. That provision requires legislation by Congress. Estimated potential impact: 3-4 million households.

3.) Doubled resources to Fannie Mae and Freddie Mac. To encourage investors to buy the secondary market companies' mortgage-backed securities, the government explicitly backstops them to up to $400 billion, twice the current amount.The plan does not provide help to investors or to home owners who are in trouble with a second home, nor does it apply to homeowners whose mortgage is part of a private-label mortgage security that is not backed by Fannie Mae or Freddie Mac. "The administration's proposed plan, combined with provisions like the $8,000 first-time home buyer tax credit in the just-enacted American Recovery and Reinvestment Act, will help minimize foreclosures, shrink housing inventory, stabilize home values, and move the country closer to an economic recovery," says NAR President Charles McMillan.

REALTOR® Magazine Online

Looking at the Tri-Cities Housing Market

What is happening in the Tri-Cities? Each housing market is different and should be measured independently. We have the most solid foundation with economic drivers such as: technology, Hanford clean-up, education, medical, wine industry and agriculture. Focusing on the positives is going to bring us far out in front of almost any other community in the nation.

Reviewing the entire market, January 2008 had 176 under contracts compared to this January of 195. One of the few places the local market is struggling is the upper price range.

Stimulus Advances With Tax Credit Changes

The $790 billion stimulus package hammered out by House and Senate conferees late yesterday increases the home buyer tax credit to $8,000, from $7,500, and drops the repayment feature for buyers who hold on to their property for at least three years. The legislation also extends the effective date of the credit to December 1 from June 30, and extends eligibility to borrowers who buy their home with the help of state or local financial assistance that comes from the proceeds of tax-exempt mortgage revenue bonds. The credit remains open only to first-time buyers (those who haven't owned in at least three years) and some income eligibility restrictions apply, but those are unchanged from the existing program.

Mortgage Rates Drop This Week

A dip in the long-term mortgage rate this week offered home owners a refinancing opportunity, according to Freddie Mac.

This week's rates:

• Average interest on 30-year fixed loans fell to 5.16 percent from 5.25 percent last week.
• Interest on 15-year fixed loans also declined, slipping to 4.81 percent from 4.92 percent.

Charleston Post and Courier (02/13/09)

Positive News for Our Local Economy

Sen. Maria Cantwell, D-Wash., was appointed today to lead the Energy Subcommittee of the Senate Energy and Natural Resources Committee.

The subcommittee has oversight of topics important to the Tri-Cities, including nuclear fuel cycle policy, the Department of Energy national laboratories and nuclear research, development and commercialization.

Other topics addressed by the subcommittee include climate change, strategic petroleum reserves, other energy research and commercialization, and the Trans-Alaska Pipeline System.
Among her goals is working with committee leadership to “leverage the incredible brainpower and innovation at our national labs, get our nuclear waste clean up efforts back on track, and ensure fair and functioning energy markets,” Cantwell said in a statement.

Transitioning to a clean energy system will be a key component of the nation’s economic recovery, she said.

2/11/09
Tri-City Herald

Senate Added Significant Homebuyer Tax Credit to Housing Stimulus Plan

Here are the key elements of the credit:

• The tax credit is for the amount of $15,000 or 10% of the purchase price (whichever is less), with the option to utilize all in one year or spread out over two years. The credit does not have to be paid back.
• The tax credit is available to all purchases of any home from date of enactment for one full year - no longer just a first time homebuyer credit.
• Able to claim the credit against the 2008 tax return.
• Buyers must occupy the home for two years as their principle residence.
• Includes a two year recapture provision (if they leave the home in two years they lost the credit).
• Purchases of homes by investors are ineligible.
• Sunsets the previous $7,500 Housing Tax credit on the date of enactment.
• The credit is not refundable. (The $7500 credit was refundable, but had to be paid back).

The bill is still working its way through Congress. The House of Representatives must still negotiate with the Senate, and the House bill does not contain the credit. There may be additional changes, but this is an important step forward.