Obama’s Stimulus Package Offers First Time Home Buyers Huge Benefits!

26. May 2011 · Write a comment · Categories: General Tax · Tags: , , , , , , , , ,

If you’ve been following the news, you are likely familiar with the federal government’s 0-900 billion stimulus package designed to boost the economy by creating new jobs, providing mortgage assistance, educational grants, and a suite of other incentives.  A key part of this package is the first time home buyer stimulus program aimed at reviving the ailing housing market by assisting first time home buyers and buyers who haven’t purchased a home in the last three years.  The incentives for those qualifying under this program are such that even those previously opposed to buying a home in this market are now changing their minds.

The main reason the first time home buyer stimulus package is so attractive is that it directly addresses the concerns that most people have about buying a new home.  The first concern that most people have is how they will come up with the down payment.  After all, you must have a considerable sum of money saved away in order to come up with a ten percent down payment.  Thanks to the stimulus package, however, the federal government will help first time buyers by paying a percentage of the down payment.  In other words, you do not have to come up with the full amount on your own.  The second worry is the dreaded interest that accompanies monthly mortgage payments.  There is good news here as well as the federal government has cut interest rates.  Thirdly, those qualifying as first time home buyers can apply for refundable tax credit of ten percent of the purchase price of their homes (up to ,000) if they enter into a binding agreement by April 30th of next year.  This is practically money in your pocket which you do not have to pay back unless you decide to sell or move out of your home within the first three years.

With all these benefits, no wonder more and more people are getting exciting about buying a new home in these tough economic times.  These incentives will not last forever so if you have a steady source of income and are serious about owning your own home, now is the time to act.

Steps for Home buyers purchase first home

23. May 2011 · Write a comment · Categories: General Tax · Tags: , , , ,

Buy your dream home is as easy as ABC. Follow these simple steps. It may be months or even years ready to buy, not get discouraged, just work on it every day. Once you move into your new home, it will be worth all the planning and preparation! So, just to stay focused on your goal and persistent.

A. Prepare for the purchase:

Before Writing your family financial goals (short and long term). For example: Buy a housewithin one year; Be debt free within 10 years.

http://www.firsttimehomebuyerloans.goodarticlesite.com/steps-for-home-buyers-purchase-first-home/

According to Prepare a monthly household budget. Your monthly debts (including car payments, child support, and payments by credit card) should be 10-15% of your gross monthly income. Contact your Financial Planner for their support.

Third Update your credit report. Make all loan payments on time for at least six months. Agreements to settle all open meetings of factors such as depreciation or student loans defaulted.

FourthEliminate consumer debt. Do not buy a car or other major purchase on credit.

B. Pre Sales TIME:

Before you fill in the form of loan application (1003) and in turn to your lender with the tax credit check (usually about $ 25 per person).

Follow with a second agent will receive a letter of loan pre-qualification by the lender.

Third contact your broker ®, pre-qualified for homes in your price researchSpectrum.

® See Fourth with your estate agent and find the best holiday for your family.

Your Realtor ® Fifth bids to buy a house. Your offer will be from your deposit deposit (usually $ 1,000 or more to be accompanied).

Negotiate a sale price

Negotiate a sale begins when you make a bid for the home. Depending on the market, this is usually less than the price the seller. The seller may accept, reject or ignorethe first offer. It can also be a counter offer, which is a grant to meet the price offered by your-way lower.

Remember, there are two parts, an ‘offer: price and terms. So if you do not agree on price, perhaps you can provide conditions that help both parties reach an agreement. There is an old saying in real estate transactions, “they call the price, and I name the terms,” which means that both are important parts of the offer.

After the firstcounter-offer, the buyer and the seller may pass through a series of counter offers, to reach a sale price (if everyone agrees). This means distributing, or the gap between list price and the first bid is close. Armed with assessment and report, can provide effective information and negotiate a final sales price.

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First Time Home Buyer Credit – Qualifying Criteria and Restrictions

14. May 2011 · Write a comment · Categories: General Tax · Tags: , , , , , , ,

If you are looking to buy your first home in the near future, it is likely that you have heard about the first time home buyer stimulus program which offers you a tax credit of up to 10% on the purchase price of your home (up to 00) if you purchase by April 30th of next year. You are probably also familiar with the basic qualifying criteria like not having purchased a home as your “primary residence” in the three years prior to your current purchase and being within certain income limits. There are, however, certain lesser known restrictions and exceptions surrounding the regulations that could impact your eligibility. Failing to be aware of these provisions could result in an unpleasant experience with you being denied the credit or required to repay it. Conversely, if you meet certain conditions, the law may make certain exceptions that allow you to receive the credit even if you normally wouldn’t qualify.

Firstly, you must keep in mind that this program is designed to assist genuine first time home buyers who are purchasing a home as their primary residence. House flipping is not encouraged. The law requires that you maintain the home you buy as your primary residence for at least three years following your purchase. If at any point during that period your home ceases to be your primary residence (such as if you decide to sell it), then the credit must be repaid. Exceptions may apply to members of the armed services, intelligence community, and the Foreign Service who are under government orders for extended duty service. Next, you do not qualify for the credit if you bought the home from a close family member such as spouse, parent, grandparent, or child. You also cannot claim the credit if you are a minor or non resident alien. Residents living in the District of Columbia who have claimed the Washington D.C. first time home buyer credit also do not qualify. There is some good news for you, however, if you are a member of the armed services, Foreign Service, or intelligence community serving overseas. If this describes your current situation, then you have an additional year to purchase your home. This means that you have until April 30th, 2011 to enter into a binding agreement and until June 30th, 2011 to close on your purchase.

Although the basic qualification criteria surrounding the first time home buyer credit are relatively simple, the devil does indeed lie in the details. Make sure you avoid disappointments and missed opportunities by doing all your research and staying up to date on the latest developments.

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First Time Home Buyers, Good News

12. May 2011 · Write a comment · Categories: General Tax · Tags: , , , , ,

Mortgage rates pretty much held steady last week, which is good news for those wanting to refinance at a lower rate and for buyers, especially first time buyers. Freddie Macs Primary Mortgage Market Survey (PMMS) for a 30 fixed loan was a scant 4.86%, up slightly from last weeks 4.84%. Last year at this time, while the “bubble” was bursting, mortgage rates were 6.01%.

Real estate professionals from around the country are reporting increasing sales, not by a lot, but increasing. Still, there is quite a bit of inventory out there on the books yet, meaning supply is still out in front of demand.

Another thorn, the major banks have been impediments standing in the way of short sales. Banks get less money in a short sale situation. Some banks, including Bank of America, have reportedly been taking a more rational stance lately on short sales to avoid the costly foreclosure process. So banks with a lot of inventory and eminent foreclosures will be able to get more homes off the market. They may take less money, but some is better than none and it lessons inventory which will eventually drive prices up.

Higher home prices will definitely be part of the near future. Good news for sellers and builders. Bad news for buyers. The time to buy is now. There’s a good chance we’re in the trough of this latest business cycle and about to start the recovery phase. When that happens home prices will rise and interest rates will soon follow to try and head off inflation.

Some really good news coming out has to do with the Governments 00 tax credit for
qualified first time home buyers. Right now the FHA is finalizing a plan that would allow for the tax credit to be used up front as a down payment. If, and when, this program goes through, it will be a big win for the market.

After the sub prime loan debacle of the last several years where anyone could get a loan and buy a house with no money down, no credit and in some cases no income, the banks have become much more strict in their lending practices. It’s been difficult for this administration to get any momentum behind it’s efforts to end the housing crisis. This new FHA program just makes sense. By giving the credit up front, it will greatly improve peoples ability to acquire financing with the required 3.5% down. There will still be income and credit qualifications so we don’t end up in another mess like the one we’re pulling out of, but it will help to get the ball rolling and get these houses off the market and lived in.

So again, the time to buy is now. The time to sell will be in the near future. Somewhere along that line the market will hit equilibrium, where it is the most beneficial for both buyer and seller, but for the most part one benefits more than the other. Right now it’s the buyers turn. Right now it’s a buyers market.

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Benefits of the Government Extending the First Time Home Buyer Credit

06. May 2011 · Write a comment · Categories: General Tax · Tags: , , , , , , ,

The real estate began to slow down when the mortgage industry had troubles and the house values suddenly dropped. Since this is one of the biggest contributors in the Gross Domestic Product, the government had to find ways to boost it again. 

Real estate is not the only source of the government’s income but it is also the source of jobs for many people. If this continues to drop, many people would become unemployed. House values continue to decline. Moreover, the US economy will be in big trouble. 

In an effort to boost the real estate sector, the government has implemented the American Recovery and Reinvestment Act of 2009. This entitled first-time homebuyers to avail of as much as ,000 tax credits. 

Details of the Program 

This program was made for first time homebuyers of newly constructed or resale properties, who made their purchase beginning January 1 until November 30, 2009. To be considered as a first time homebuyer, a person must not have not owned a property as a principal residence for a period of three years prior to date of purchase. If qualified, the taxpayer will be entitled to a 10% of the home’s purchase price tax credit or a cap of ,000. However, there may be partial tax credits due to those who have gone beyond the lowest income limits and there will be none for those who have exceeds it. 

The program is about to end as the last date of purchase should be made before December 1, 2009. This means any transactions not closed after November 30 will already forfeit the benefit. 

To extend or not to Extend 

The program had such a positive effect to the real estate market. People are really buying homes to avail of the benefit. Even the IRS could attest to this as they declared over that there over 1.4 million taxpayers who are qualified to make the claim. And this was reported as of the middle of September. 

Because the program has helped in the progress of the real estate sector, many individuals and even lawmakers are pushing for its extension. There have been so many speculations on the effects if it was discontinued. The real estate sales could drop easily. Many people would lose employment opportunities. Moreover, people would lose the chance of getting thousands of dollar savings from home purchase. 

True there are so many benefits if this program is extended. However, there are also speculations as to its negative impact to the other sectors of the economy. For one, the budget for the other industries may be compromised. This could lead to their decline, if a bigger portion of the country’s budget would allot to the real estate industry. 

From the looks of it, the benefits of extending the program, outweighs its costs. Well, it will all be up to the government to find the optimal program to boost real estate market without having to sacrifice other sectors. 

As for the people, everybody continues to hope for its extension. The outlook seems good and there may be some changes in the program for its betterment.

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