President Obama has signed a bill that extends the tax credit for California first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009 for FHA FTHB’s.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for all California FHA borrowers who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the exception that more FHA borrowers are now eligible based on an increase in the borrower’s income limit.

Additionally, the program now gives those who already own a home some additional incentive to move up. This comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be signed no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

FAQ
 

• What is a tax credit?
  A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

 

• What is the tax credit for first-time homebuyers (FTHBs)?
  An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

 

• Who is eligible for the FTHB tax credit?
  Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing        homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

• How do I claim the credit?
  For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

 

• Can you claim the tax credit in advance of purchasing a property?
  No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

 

• Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
  Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

 

• Are there other restrictions to taking the credit?
  Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

 

1. You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
2. You do not use the home as your principal residence.
3. You sell your home before the end of the year.
4. You are a nonresident alien.
5. You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
6. Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
7. You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

• Can you buy a home from a step-relative and be eligible for the credit?
  Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

 

• Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
  Yes.

 

• Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
  No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

——————–

Top Articles / Links / Questions:

1. FHA Loan Limits – Upland, CA
2. FHA Seller Paid Closing Costs – Upland, CA
3. California Investment Property With an FHA Loan
4. What Is FHA Gift Money?
5. The Trouble With FHA Loans in California

——————–

Brian Wiesner California FHA Mortgage Expert Monaco Mortgage Corporation Toll Free: 866-343-1579 Direct: 909-581-4075

---

Copyright © 2008
This feed is for personal, non-commercial use only.
The use of this feed on other websites breaches copyright. If this content is not in your news reader, it makes the page you are viewing an infringement of the copyright. (Digital Fingerprint:
)

Top 10 Things to Know if You’re Interested in a Reverse Mortgage

By Laurie Willis

Reverse mortgages are becoming popular in America. HUD’s Federal Housing Administration (FHA) created one of the first. The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program which enables you to withdraw some of the equity in your home. The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements and more. Since your home is probably your largest single investment, it’s smart to know more about reverse mortgages and decide if one is right for you.

1. What is a Reverse Mortgage?

It’s a loan against your home that requires no repayment for as long as you live there. A reverse mortgage allows you to convert a portion of the equity in your home into cash. Unlike a traditional home loan, no repayment is required until the borrower(s) no longer use the home as their primary residence.

2. How do I Qualify for a Reverse Mortgage?

To be eligible for a reverse mortgage all borrowers must be 62 years of age or older. You must own your home outright, or have a low mortgage balance that can be paid off with proceeds from the reverse loan, and you must live in the home 6 months of the year.

3. What types of homes are eligible?

Your home must be a single-family property, PUD, or a 1-4 unit home with one unit occupied by the borrower(s). HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

4. What’s the difference between a Reverse Mortgage and a bank home equity loan?

With a traditional second mortgage, or home equity line of credit you must document you income and ability to repay the loan. There are also minimum credit score requirements for loan qualification, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income or credit scores.

5. Can the lender take my home away if I outlive the loan?

No. You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than the value of your home at the time you or your heirs sell the home.

6. Will I still have an estate to leave my heirs?

When you sell your home, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees to the lender. The remaining equity in your home, if any belongs to you or to your heirs. Remember, reverse mortgages are generally ‘non-recourse’ loans, which means the lender does not have recourse to anything other than your home, not your income, your assets, or your heirs income or assets.

7. How much money can I get from my home?

The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

8. Should I use and estate planning service to find a reverse mortgage?

FHA does NOT recommend using any service that charges a fee for referring a borrower to and FHA lender. FHA provides the information for free, and HUD-approved housing counseling agencies are available for a very low cost. In fact, counseling is a HUD requirement before borrowers can start the reverse mortgage borrowing process.

9. How do I receive my payment?

In the past, there were many options to receiving payment. However, most reverse mortgage lenders are limiting the rate/term for reverse mortgages to a fixed rate only, which requires the borrow to receive a lump sum payment upon closing

10. Can I use a Reverse Mortgage to Purchase a Home?

Yes, effective January 2009 you can now qualify to use a reverse mortgage to purchase a home if you are 62 or older and plan to live in the property as your primary residence. The program was designed to allow seniors to purchase a new primary residence and obtain a reverse mortgage within a single transaction. The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs.

There’s a lot of information and misinformation available out there on reverse mortgages. Please feel free to call me or e-mail if you want the straight scoop about a reverse mortgage and whether or not it may be right for you. (Note: This was prepared by Laurie Willis, Senior Mortgage Advisor with Alpine Mortgage Planning in Eugene. She is very knowledgeable in Reverse Mortgages and I work with her exclusively when working on a reverse mortgage. It is always best to have the best, especially in something as controversial and having so much misinformation about it as a reverse mortgage. You can reach Laurie directly at 541-342-7576.)

 

---

Copyright © 2008
This feed is for personal, non-commercial use only.
The use of this feed on other websites breaches copyright. If this content is not in your news reader, it makes the page you are viewing an infringement of the copyright. (Digital Fingerprint:
)

Posted To: MBS Commentary

I think Friday's close caused more confusion than clarity. The concept of technical price levels being more informative in HINDSIGHT may be the culprit. That, and the fact that there were a few lines in the chart that seemed to be pointing toward "something." But today's price action is exactly the reason that the time was right to discuss the two epic and competing trends. Here's the chart from Friday's close: And here are some thoughts with respect to the upper trend on Friday: "whether or not it actually holds concrete-firm, the more important component of my revelation is that it "feels" like an appropriately sloped suggestion of the gradual and volatile path of the rate market's return to something a bit more historically average (eventually…(read more)

Posted To: MND NewsWire

Federal Reserve Chairman Ben Bernanke today spoke at the Economic Club of New York. The topic of his speech was the Outlook for the Economy and Policy . While nothing groundbreaking was said, I do want to recap his comments and point out a few observations. Bernanke opened with the usual mixed message, progress has been made but several considerable challenges lie ahead… "financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible." I don't like making Ben look like a politician, but at this point one of the biggest factors affecting his outlook and the market's perception of our economic well-being…(read more)

Posted To: MBS Commentary

As the session draws closer to close, the FN 4.0 is +0-18 at 99-22 yielding 4.035% and the FN 4.5 is +0-08 at 102-01 yielding 4.252%. The secondary market current coupon is now 4.078%. The CC is +74/10yr TSY and +65/10yr swap. In MBS market trade flows, we've noted fast money accounts taking profits in the belly of the coupon stack, specifically 5.0s and 5.5s. Of course, the Fed has made their presence known today…easily absorbing originator supply…which again was light…especiailly at these rich dollar prices. While the lack of new loan production is somewhat distressing from a trader's perspective, from where we stand, it's more of the same old same old…most fence sittters have already refinanced while others continue to battle tighter lending guidelines and a lack of equity…(read more)

Posted To: MBS Commentary

MBS prices have added on 3-4 ticks from this AM's already higher levels. The 4.5 is up 9 ticks overall to 102-01. That's right, 102 as in ONE ZERO TWO. MBS closed as high as 101-31 on May 17th just before Black Wednesday hit… As we mentioned last week, at that time, treasuries were closer to 2% than 3% in the 10yr. An although the 10yr has rallied 20 ticks so far today, dropping the yield 7bps, the 2% handle is but a faded memory considering the current yield of 3.351. You'll notice in the chart below that both MBS and tsy's (and stocks for that matter) are showing some early signs of fizzle as none of the 3 appear willing to extend beyond respective resistance today. That centers on 102-00 for MBS, 1110 in the S&P and 3.35 in the 10yr Watching and waiting is about all…(read more)

Posted To: MBS Commentary

The stock lever is broken… Sure, it is still fairly easy to see things lining up on an intraday basis, but day over day, any positive correlation is destroyed. It's not that hard to accept that enough money is coming back off the sidelines to keep both sides of the fence green more frequently than normal. But it begs the question, when does lever reconnect? At least we know it wasn't at stocks' open this AM. Couple things to note on the the chart above… Blue line is S&P as always… And the 3.38 is thrown in for reference to a very commonly occurring price level in recent months.. Other than that, the chart shows two consecutive days of gains for both the 10yr and stocks… Again, more uncommon than not… So, is there a magic number in stocks that would prompt a bit more…(read more)

Like in 2006, 2007 and 2008, Autumn 2009 is marked by falling leaves and falling mortgage rates.

The trend looks more like a pattern.

Based on Freddie Mac data of the last 4 years, 30-year fixed mortgage rates rise from January through August, and fall through fall. There’s 6 weeks left until January. The clock may be ticking for today’s home buyers and rate shoppers.

Posted To: Mortgage Rate Watch

Over the past few month I have been using a very well defined strategy to gauge lock/float opportunities. The idea is to lock when mortgage backed securities approach their recent range's price highs, and float when MBS are near the bottom of their recent price range. This "play the range" strategy has worked very well for my clients, with many locking in near historically low 30 year fixed mortgage rates. On Friday, MBS closed at their best levels in several months which allowed lenders to issue aggressive rate sheets. In accordance with my strategy, I advised locking in rates on Friday. The week ahead is busy, so there will be plenty of motivation for movement in the rates market. The busy week of data began this morning with the release of the Retail Sales report. Since consumer…(read more)

Watch the Tax Credit Video here -

Lake Mary Real Estate buyer’s are due to benefit greatly from the extension AND expansion of the $8000 First Time Home Buyer Tax Credit. Now it includes the $6500 Move up Buyer Tax Credit!

Not only do first time buyers get more time to find the perfect Lake Mary home, but those homes that may have been off the market may be coming on the market.  Why?  Because now certain move up buyers also get a “move up buyer” tax credit.

Now, it is important not to let the tax-tail-wag-the-dog, but folks on the fence may have more of a  reason to make a move.  With underwriting guidelines likely  to continue to constrict into 2010 – now may be the absolute best time.

______________________________________________

Chris is Florida’s #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the many leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, the newest contributor to Lenderama and has been recently featured on Fox35 News.

Chris can be found at
Orlando FHA Loans,
Chris[at]OrlandoMortgagePro[dot]com,
or by calling 407.377.0500 x 210

Click Here to Apply Online

Not sure how to connect? Find out at FindChrisBrown.com

---

Copyright © 2008
This feed is for personal, non-commercial use only.
The use of this feed on other websites breaches copyright. If this content is not in your news reader, it makes the page you are viewing an infringement of the copyright. (Digital Fingerprint:
)