Recently, I have been getting a lot of phone calls and e-mails asking me questions about the $8000 home-buyer tax credit so I wanted to answer the most asked questions and make it as simple as possible.
So who gets the credit? First-time home buyers or someone who hasn't owned a home in three years.
How much is the credit? $8000 or 10% of the home's value, whichever is less.
What do you have to do to get it? Claim it on your 2008-2009 taxes.
It's totally refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount
Is there a deadline? The purchaser must purchase their new home between January 2009 to November 2009.
Do you have to pay the money back? If you reside in the home for three years, you do not have to pay it back.
Are there any restrictions? Yes. buyers must make less than $75,000 for singles or $150,000 for couples. Higher-income buyers may receive a partial credit.
Is it easy to apply for the credit? Yes. It's as easy as filing your taxes.
What if you already filed your taxes? If you have already completed your tax return, you can file amended returns for 2008 to claim the credit.
It's a great incentive if you are a first-time home buyer. With low interest rates, low home prices, plenty of inventory and now this tax credit, I find myself wishing that I was a first-time home buyer again.
If you are on the fence, it may be time to jump off.
Renee Porsia is a Realtor in Philadelphia.
Wednesday, February 25, 2009
Tuesday, February 10, 2009
The Federal Stimulus Package
The Federal Stimulus Package will get approved. It may not be perfect and may not produce immediate results, but it will add some level of confidence. The government sponsored $15,000 tax incentive is also going to become a reality. It will apply to buyers of new or used homes, first time buyers, move-up buyers and active adults.
Tuesday, February 3, 2009
A word from Met Life
January was an excellent month for mortgages as far as rates went. However, with volume that accellerated at an unprecendented pace due to the government intervention in the mortgage backed security market lenders felt themselves overloaded and raised rates to control volume towards the end of the month. However, even with the "higher" rates we still finished around 4.75% on the conforming and around 5% on the FHA 30yr fixed.
The market we are working in is best described as a "contrived" one. We wouldn't be here without the federal government using bail-out funds to purchase MBS's(mortgage backed securities). This intervention is scheduled from January-June. I imagine the powers that be will re-assess towards the June if any furthur intervention will be needed. The point of this is that buyers need to be made to understand that this is a once in a lifetime opportunity. The lowest rates ever plus low purchase prices equal something we will probably never see again. We have some print material showing this if any of the sales agents would like something to use to educate clients.
Another thing you are probably hearing is "We are waiting for rates to go lower". Don't hold your breath! At this point the secondary market isn't set up for sub-4% rates. There is no actively traded sub-4% MBS coupon so there is no way for lenders to replenish their pipelines if they sell a sub-4% rate. If this changes, then maybe we will see a lower rate, but I still wouldn't wait for it.
We are finally seeing purchase inquiries pick up as the rates stay low for this extended period. The more we can get the word out of how this is a unique opportunity the more purchase business we will see.
Some numbers-
At a $200,000 loan amount-
5%=$1073/month P&I
6%= $1199/month P&I A $126/month difference. (And 6% is still a historically low rate.)
To make the some payment ($1073) at 6% the loan amount would have to be $179,000. That 1% rate drop is worth 10% in buying power! That is over $20,000 in "free" money and it's not going to be around forever!!
If you need a flyer showing this example to buyers please contact one of the Metlife loan officers.
Thanks for letting all of us be a part of your team. We look forward to being a part of your success!
Giles Rebholz
Timothy Ostrom
Deak Allison
Jarod Wallace
The market we are working in is best described as a "contrived" one. We wouldn't be here without the federal government using bail-out funds to purchase MBS's(mortgage backed securities). This intervention is scheduled from January-June. I imagine the powers that be will re-assess towards the June if any furthur intervention will be needed. The point of this is that buyers need to be made to understand that this is a once in a lifetime opportunity. The lowest rates ever plus low purchase prices equal something we will probably never see again. We have some print material showing this if any of the sales agents would like something to use to educate clients.
Another thing you are probably hearing is "We are waiting for rates to go lower". Don't hold your breath! At this point the secondary market isn't set up for sub-4% rates. There is no actively traded sub-4% MBS coupon so there is no way for lenders to replenish their pipelines if they sell a sub-4% rate. If this changes, then maybe we will see a lower rate, but I still wouldn't wait for it.
We are finally seeing purchase inquiries pick up as the rates stay low for this extended period. The more we can get the word out of how this is a unique opportunity the more purchase business we will see.
Some numbers-
At a $200,000 loan amount-
5%=$1073/month P&I
6%= $1199/month P&I A $126/month difference. (And 6% is still a historically low rate.)
To make the some payment ($1073) at 6% the loan amount would have to be $179,000. That 1% rate drop is worth 10% in buying power! That is over $20,000 in "free" money and it's not going to be around forever!!
If you need a flyer showing this example to buyers please contact one of the Metlife loan officers.
Thanks for letting all of us be a part of your team. We look forward to being a part of your success!
Giles Rebholz
Timothy Ostrom
Deak Allison
Jarod Wallace
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