As of today, you have 30 days to have mutual acceptance on a home purchase and still receive the homebuyers tax credit, which is set to expire soon. In order to qualify for the credit, you must have mutual acceptance on the home you are purchasing by April 30th, and it must close by June 30th.

According to the opinions in the following article, most people think that this will be the end of the tax credit. There isn’t much hope that it will be extended.

http://curiouscapitalist.blogs.time.com/2010/03/30/extending-the-home-buyer-tax-credit-up-is-down-and-down-is-up/ 

If you are hoping to purchase a home using either the first-time homebuyers credit of $8,000, or the move-up buyers credit of $6,500, give me a call today to get pre-approved right away. You don’t want to miss out on this one!

Getting a mortgage these days can leave YOU feeling overwhelmed and helpless. If only there was a way to know that you’re getting honest, accurate information to make informed, educated decisions about YOUR mortgage.

 I don’t know about you, but I really dislike buying a car. I dislike the whole process. There is a whole lot that goes on behind the scenes that I don’t understand. I never know if I can believe what the salesman is telling me. I never know if I’m getting a good deal or being taken advantage of.

Perhaps that is why I approach helping people get mortgages a little differently. I think that it’s important for you to have all of the information you need to make a wise decision. It’s your mortgage – you’re the one who is going to live with it for possibly the next 30 years.  You need to be certain that you’ve gotten the best mortgage to fit your needs, structured in the correct way to help you achieve all of your financial goals.

I believe that getting a mortgage doesn’t have to be a painful experience. You don’t have to simply turn over all of your personal and financial information and then just hope for the best…hope that your loan originator knows what they are doing – hope they are telling you the truth – hope they have given you the best advice on which loan option to choose – hope they know the best time to lock in your rate … Instead, once given the information you need, you can choose how to structure your mortgage and what rate to choose. I have the tools to help you do just that. Let me show you what I mean…

Things aren’t always as they seem.

If you’re not familiar with the terminology and the loan process,

how will you know if you are getting a good deal, or being taken advantage of?

(by the way… the man squatting in the picture above isn’t holding anything in his hands. All of the water, the drain, and the hose and reel– just a chalk drawing.)

When you work with me, I won’t just tell you what loan options you have and which one will be best for you – I’ll SHOW YOU.

Do you know the answer? Which is better – a lower rate with higher fees, or a higher rate with lower fees?

I won’t just quote you a rate and fees, I’ll SHOW YOU how much you will save each month and over the life of the loan.

Then YOU make the decision as to which loan option is best for you.

Should you ask the seller to help you with your closing costs? Or would it be better to ask them to help you buy down the rate instead? What is the best way to structure your offer so that you’ll save the most amount of money? I’ll SHOW YOU what the different options will mean to you in dollars and cents, and then YOU decide what is best.

Is now a good time for you to buy? Or would it be better to wait in case home prices decrease? I won’t just give you my opinion, I’ll SHOW YOU the numbers in black and white. Then YOU make the decision.

  How will you know who has the best rate? Is spending your time and energy rate shopping with several different lenders the only way to know? How will you know the best time to lock in the rate? I won’t just tell you what the markets are doing – I’ll SHOW YOU.

…and I’ll SHOW YOU which lenders are raising their rates, and which ones are lowering their rates – in real time. Then YOU decide when it’s the best time to lock in your rate.

Getting a mortgage doesn’t need to be a frustrating experience that leaves you feeling helpless.

I won’t ask you to trust me, I’ll earn your trust, by giving you the information you need to make informed, educated decisions about your mortgage.

Every person who owns a home in the U.S. is losing value and equity in their home because of HVCC. HVCC (Home Valuation Code of Conduct) is supposed to stop appraisal fraud by not allowing loan originators to have any direct contact with the appraiser. The problem is that all appraisals must now be ordered through Appraisal Management Companies, which are owned by none other than, the banks. hmmm… what is wrong with that picture?!

Andrew Cuomo is receiving an early Christmas present today -

Mark Sevitt, past president of NAMB (National Association of Mortgage Brokers), along with Frank Garay and Brian Stevens, are delivering 50 boxes of signed petitions (120,000 signatures) of people in the mortgage industry, real estate industry, and consumers, to Andrew Cuomo’s office today, requesting that HVCC be stopped. HVCC has done nothing to stop fraud, actually appraisal fraud is up by 46% in Q3 2009. Since brokers haven’t been able to have any direct contact with appraisers since March 2009, it appears that they have been incorrectly targeted as the problem. HVCC has done nothing but slow down the housing industry recovery and cause transaction after transaction to not close. That is the last thing the housing industry needs right now.

Here is a partial list of what HVCC does:

1. The loan originator must order the appraisal through the AMC – which on average adds about one or two weeks to the process.

2. The appraisal ordered from one lender cannot be transferred to another lender, so if something with the 1st lender doesn’t work out, the homeowner has to pay for a new appraisal to be done. ($500-$600)

3. The appraisal has to be paid upfront by the homeowner, out of pocket, before he even knows if the transaction will be approved or not. The approval, of course, is based upon the value of the home. Since no one can talk to the appraiser ahead of time, there is no way to determine if the value will be there, or not.

4. The AMCs don’t choose appraisers based upon what areas they are familiar with, as loan originators used to do. The appraisals wind up being done by appraisers who don’t even know the area the home is in.

The bottom line is that HVCC, which was intended to protect homeowners from fraudulent appraiser/lender relationships, is doing nothing but hurting them, instead. It’s only accomplishment has been to give the big banks even more power and control (along with a new revenue source) than they already have. It’s time to put a stop to HVCC – now.

Here is an excerpt from www.nahb.org on the new and extended Homebuyers Tax Credit. Please feel free to contact me if you have any questions.

2009-2010 Homebuyers Federal Tax Credit Fact Sheet

Who is Eligible

• First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit. 
• Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit. 
• All U.S. citizens who file taxes are eligible to participate in the program. 

Income Limits

• Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.  
• For married couples filing a joint return, the combined income limit is $225,000. 
• Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.  
• The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. 

Effective Dates

• The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.  

 Types of Homes that Qualify

• All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.   

 Tax Credit is Refundable

• A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference. 
• For example:  
  • A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time home buyer tax credit).  
  • A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit). 
• All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return. 

Payback Provisions

• The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

First-time Homebuyers Tax Credit Extension Is Official

Great news! The extension for the First-time homebuyers tax credit is official. And it’s not limited to first-time homebuyers, either! First-time homebuyers (that is, people who have not owned a home within the last 3 years) may be eligible for the tax credit of 10% of the purchase price of the home, up to $8,000.

Homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years, may qualify for a tax credit of up to $6,500.

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

It’s important to remember that the tax credit is just that… a tax credit – a dollar-for-dollar tax reduction, rather than a reduction in a tax liability. If you owe nothing, you will receive the tax credit in full. If you have a refund coming back, you will receive the refund plus the tax credit. If you owe taxes, you will receive the tax credit minus the amount you owe.

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.

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

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Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.

In addition, you may be able to benefit from additional housing related provisions, including the following:

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Tax Incentives to Spur Energy Savings and Green Jobs

This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings

This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing

This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8 to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance

This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

As summer approaches and the temperature keeps climbing, so do interest rates. I had an email from a client who is looking to purchase his first home. His question is very appropriate considering the housing market and interest rate environment. He asked,

“I see the rates are on the rise once again. Is this becoming a worse deal as time passes? Do you foresee a decline at all? I am seeing ~6% for 30 year fixed when it was 5.7 a week ago and below 5 a month ago. Is it best to wait now in your opinion or get in now?”

Here was my response:

Here is a chart of the history of 30 year fixed rates since 1975. As you can see, even though rates are higher now than they have been recently, we are still at over 30 year lows. The average rate over the past 30 years is about 7.5%. Being able to get a 30 year fixed rate in the 5% range is not something to pass up. It would definitely be a big gamble to decide to wait to buy until rates go back into the 4% range. There are just no guarantees of that happening again.

The Fed has been keeping rates artificially low by purchasing mortgage bonds. They are having to do quite a balancing act between keeping rates low to help stimulate the housing market, and needing to raise them so the dollar doesn’t become too de-valued and spur inflation. The Fed will raise rates once we are on the road to recovery in order to slow down inflation. The things to watch in regard to inflation are both home sales and employment numbers. People need to be gainfully employed before they can purchase a home, and our housing market needs to back on it’s feet for our economy to recover.

The most recent pending home sales numbers had the biggest jump that we’ve seen in 7-8 years, but taking a closer look, 47% of those pending sales are foreclosures or short sales. They are not people selling one home and moving up to a larger one which is the normal pattern. They are people losing their homes and not turning around and buying again. The bottom won’t happen until we see a stop in the increase of delinquencies and foreclosures. In the 1st quarter of 2009 the increase nationwide in mortgage delinquencies rose to over 9% and foreclosures to over 2%. So almost
12% of homeowners nationally are delinquent on their mortgages, in foreclosure, or in default.

The unemployment rate is 9.4% for May. There is a good video on this subject at http://www.cnbc.com/id/15840232?video=1145383846&play=1 .
This video explains that the true unemployment rate is closer to 16%. There are 14.5 million people unemployed, but the numbers that are being left out of the calculation are the 6.6 million people that have given up looking for work, so aren’t included in the work force. Also, there are 9.0 million people
who have taken part time jobs because they can’t find full time work. When those part time people are able to find full time work, it won’t change the unemployment rate, so the unemployment rate is really a lagging indicator. If you include all of the figures, the true unemployment rate is close to 16%. They’ve only been tracking the “true unemployment” data since 1995, but since that time, this is the highest rate on record. The Fed’s unemployment forecast is 9.4% for 2009, 9.25% for 2010 and 8.1% for 2011. We are already at 9.4% halfway through 2009.

So the bottom line is that rates will continue to react to the market, but I think we are still a ways off from worries of inflation, and rates should continue to stay fairly low with intermittent spikes up and/or down. Of course, that is assuming the Fed continues it’s purchasing of mortgage backed securities.
When jobs and or employment numbers come in and consumer confidence rises, investors move their money from bonds to stocks, the market rallies, and rates go up. When consumer confidence shrinks, investors will move their money into the safety of bonds and rates will go down. Rates tend to move
up and down in ranges. I think we have a ways to go before the range is going to increase substantially.

We still have an unbeatable combination of historically low rates and home prices, and in my opinion, it’s a great time to buy. I wouldn’t rush purchasing a home in fear of rates rising rapidly, nor would I put off buying a home to wait for them to come back down. I think the most important thing is that you take the amount of time you need to find the home you want to live in.

FHA has announced that it will allow lenders to provide short term bridge loans for first time homebuyers to use the 2009 tax credit for the purchase of  a home. See my post at www.realestatetwists.com for details.