FIRST-TIME HOMEBUYER TAX CREDIT (published 11/6/08)

A new housing bill for first-time homebuyers has more or less been overlooked by consumers following all of the turmoil in the financial markets, This tax credit is invaluable to new homeowners and you need to know how it works.

Here is the down and dirty on the bill. HR3221 was signed into law on July 30^th, 2008. Part of the bill allows for a temporary tax credit for first-time homebuyers to a maximum of $7500 and is the same amount for singles and couples alike. The amount of the credit allowable is 10% of the purchase price up to $7500. The tax credit is available to all first-time buyers who purchase a primary residence between April 9^th, 2008 and June 30^th, 2009. A first-time homebuyer is defined as anyone who has not owned a home in the last three years. Primary residence is defined as the home occupied a majority (more then 50%) of the time. The credit is allowed for individuals who earn up to $75,000 and couples who earn up to $150,000. Above those adjusted gross income limits, the tax credit begins to reduce and is gone entirely above $95,000 and $170,000 respectively. If your actual tax liability is less than the allowable credit, the result is a tax credit refund to you. The tax credit is often referred to as an interest-free loan because you are required to pay the credit back in subsequent tax years. If you qualify for the entire $7500, the payback amount is $500 per year. For lesser credit amounts, the payback is 1/15^th of the credit amount per year for fifteen years. If you sell your home before the credit is paid back, the credit remainder must be repaid with- in the same year as the sale. If you sell your home at a loss, you owe nothing. There is no way to use the tax refund credit toward down payment.

That is a lot of information in a little tiny space. We recommend you seek the advice of a tax professional. For more information and direction to available resources, call the Action Team at 970-587-9400. We’ll help you prepare to buy your home.

INVEST IN REAL ESTATE (Published 10/23/2008)

 With the stock market volatility and the uncertainty of the dollar; where can you invest safely? Invest in REAL ESTATE! There is never a bad time to buy and now is certainly the time to get a bargain. Foreclosed homes, short sales, rehab homes, fix-in-flips, fix-n-hold, distressed properties-  it all depends on your capital and expertise as to which type is the best home for you to buy.

                If you have more skill than cash, buying a home with the intent to occupy it is the least expensive way to purchase now that all of the lending guidelines have tightened. You will be required to put much less money down and the interest rate will be lower. You may want to consider moving up and keeping your existing home as an investment. Renters will do well taking the purchase leap because often the mortgage payment matches closely to rent values and can sometimes be lower.

                If you just want a more stable investment vehicle, consider buying properties. Speak with your tax advisor about the advantages for you investing in Real Estate. Inform yourself of the property laws. Then find a trusted Realtor to help you get the best property values. First time investors have to put the most money down, usually 25-30%. You may even consider forming an investment group. Take advantage of the groups increased buying power and more varied skill level and abilities.

                Not every good deal is distressed. One of the best values for the money right now is to purchase a property in short sale. There are plenty of folks who have well cared for homes that just need help out of a bad situation. Your Realtor can help you identify potential properties and negotiate the sale.

               Take advantage of this market as it will only lead to achieving financial freedom. Make your money work for you! Call Wade or Tami today.

GOOD  NEWS? (Published 10/10/2008)

It will be some time before we can identify the true effect of the Emergency Economic Stabilization Act of 2008- i.e. “the bailout” on our local real estate market. So what is the good news for us?

            The good news is that there are fantastic prices on homes and there are still good mortgage loans to be had. Homes on the market today are priced to sell. The values on re-sale homes are stabilizing and these homes are move-in ready. There are foreclosed properties available all across our community at substantial discounts. Most of these homes require varying degrees of repair or maintenance but compared with the purchase price of the house- the investment well pays for itself. Perhaps the best deal available is the purchase of a home in short sale. Often these are homes that are better cared for and require less work and money. The sellers recognize their need to sell but are still maintaining the property and the banks negotiate a win-win sales price because it is less expensive for them to take a loss than to foreclose.  

            Good loans are out there. We are fortunate enough to live in an area served by the USDA housing program known as Rural Development. It is a loan program that allows for 100% financing with no mortgage insurance. It has a funding fee of 2% that can be financed into the loan and you can get a loan to appraised value. That means if the appraised value is more than the sales price of the home, you can finance your closing costs as well. There are income restrictions so check with a reputable lender for more information. While it is true that mortgage lending guidelines are tightening, interest rates remain low. 5.625% is a great 30 year rate for a buyer with good credit and assets (rate effective 7OCT08). For more information and resources, call your local experts today, Wade or Tami 970-587-9400.