Time is a runnin’ out! Here is one last call to all you FIRST-TIME HOME BUYERS! Don’t delay. Get those offers in ASAP.  As I am sure you have heard you are eligible for up to an $8000 tax credit on your 2009 tax return.  And when they say tax credit that is what it is. It is a dollar for dollar reduction of what you owe the government. Very often this will mean cash back to you!! $8000 could be a new car.  $8000 is one heck of a vacation! Or for those prudent among us…$8000 is a mighty fine cushion in one’s bank account, come that rainy day.

Now here’s the rub. If you want to be able to take advantage of this fantastic opportunity, you need get qualified now, have your realtor write the offer, get it accepted and get that home into escrow immediately! No pressure here!  In order for you to close on this by the November 30th, 2009 deadline you will want to get an offer accepted in the next few weeks!

Now, to take off the pressure just a bit there may be a chance this tax credit will be extended into 2010. But, we don’t know this for sure. If you wait, it is a gamble. So, I suggest you do your absolute best to find that home now!

Now, let’s talk detail. What exactly does it mean to be a first-time homebuyer? Well, technically you can have owned previously. However, you may not have owned in the full three years prior to the purchase of this home. So, if you sold a home 2.9 years ago…sorry! But, if you sold a home four years ago, and rented in the meantime, you are eligible!

You are probably wondering how much you will really receive. Yes, that is an excellent question. If you were to purchase an $80,000 home you could receive the maximum tax credit of $8000. Essentially, your tax credit is 10% of the purchase price of the home. If you happen to be buying a home that is less than that price your tax credit will be less than the max allowed.  Simply calculate 10% of the home value and you have your amount.

Now let’s talk a bit about what types of homes qualify for this tax credit. Thankfully, any home that would be considered a principal residence works! This includes single-family homes that are detached, attached homes like townhouses and condominiums, manufactured homes and even houseboats! Do keep in mind that this program does not allow you to purchase a home from your parents, grandparents, children, grandchildren or spouse.

So…get out there, one and all! Let’s take advantage of this fantastic program and pray that the government finds it in their heart to extend this ever-so-useful credit into 2010! Please contact us for further questions and go to the tax credit site for more detailed information!

photo credit: wilhei55

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WASHINGTON (Reuters) – The U.S. Senate should act later this week to extend a $8,000 tax credit for first-time home buyers that is scheduled to expire soon, Democratic Sen. Bill Nelson said on Monday.

“We should be able to extend that later this week,” Nelson, a member of the Senate Finance Committee, told reporters before joining President Barack Obama on an Air Force One flight to Florida.

“The existing law ceases to exist on November 1. This would be an extension for a limited period of time,” Nelson said.

We’ll keep you posted.

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It’s set to expire by the end of the year.

Made me think of this video:

Now read this overview on why you need to get moving to take advantage of this money.

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A fake coup to solve our national debt consolidation problems??? Pretty funny. Or is it?

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• Creditors cannot increase the annual percentage rate (APR) during the first 12 months of opening up an account.
• Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes. Rates that change due to a change in the index that the rate is based on are excluded from this 45-day notice requirement.
• Promotional rates need to be in effect for at least six months from the beginning date of that promotion.
• Creditors need to provide a 30-day advance notice of an account closure.
• With certain exceptions, credit card issuers are prohibited from charging a finance charge based on the double billing cycle method.
• Creditors are prohibited from charging a fee on an outstanding credit card balance at the end of the billing period if the fee is attributed to the interest accrued on an outstanding balance that was fully repaid during that preceding billing period.

Read the full summary of provisions.

As of this blog post the President had not signed it but he has promised he will.

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The FOMC stuck to its target range for the federal funds rate at 0% to 0.25%, and signaled that rates are likely to remain at exceptionally low levels “for an extended period.” This reference stopped short of giving a timeline of 18 to 24 months for the current policy, as anticipated by some market participants.

So, money will remain cheap for the immediate term. This doesn’t necessarily affect mortgage rates but the heavy government involvement in the mortgage market ensures that mortgage rates will continue to remain low as well.

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Click on the image above to view full image.

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Here is how you can qualify if you are delinquent(or 60 days past due) on your mortgage:

• You must have lost your job, suffered a pay cut or face higher mortgage payments.
• You must meet the strict financial hardship guidelines of Fannie Mae or Freddie Mac
• These guidelines mandate you fully document your income with pay stubs, tax returns and sign an affidavit attesting to “financial hardship
• You need to go for counseling if your total household debt — including auto loans, credit cards and alimony — totals more than 55% of your income.
• Your homes unpaid principal balance can not exceed $729,750
• Have a Fannie or Freddie Mac loan (call your loan servicer to find out)

For those who are upside down on their mortgage the government will help refinance the loan in an effort to lower payment and make the home more affordable. Uncle Sam is willing to lend as much as 105% of your home’s market value. Now, I’m not sure how many people can benefit from this because many people are way above that level these days. Especially in the Greater Phoenix Metro area. The best way to start the process is by calling your mortgage loan servicer. They are the ones that will decide whether you qualify or not because the government has given them a financial incentive to help you.

Here are some additional things to consider (from the NYTimes):

A mortgage lender or mortgage-servicing company would first receive cash incentives to modify a borrowers’ loan so that the monthly housing payment declines to no more than 38 percent of the family’s gross monthly income. At that point, the government would match, dollar for dollar, the lender’s cost in reducing the payments as low as 31 percent of monthly income.

The reduced payments could come in the form of a lower interest rate, longer mortgage term or a reduction in the principal outstanding loan amount. The lender would have to make a calculation on whether its cost from reducing the monthly payments, after accounting for the government’s cost-sharing, would be less than the costs it would incur from foreclosing on the house.

The guidelines indicate that a lender would have to make the loan concessions if the subsidized cost of doing so would be lower than the cost of foreclosure. The decision would become voluntary if the estimated costs of the concessions appeared to be higher than the cost of foreclosure. If the lender decided not to offer the modification, such as in the case of a borrower who had become unemployed and whose income had largely disappeared, it would be required to examine alternatives to foreclosure before seizing the house.

The program will run until Dec. 31, 2012.

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President Obama was in the Phoenix area today to announce details of the Homeowner Affordability and Stability Plan. I guess the White House considers this area to be near ground zero of the housing bust and hence the area to be most hurting due to the housing downturn.

The plan is to help those who are in genuine need of assistance. The President said, “it will not rescue the unscrupulous or irresponsible and, it will not reward folks who bought homes they knew from the beginning they would never be able to afford.” According to the NYTimes,  “the core of the plan gives banks a financial incentive to reduce many mortgage payments to no more than 31 percent of a borrower’s income.” The Wall Street Journal has a very good summary of the entire bill for those interested.

So who exactly will benefit from this? The White House blog says the exact details of who is eligible will not be announced until March 4. However, the blog does have some answers to key questions, such as for:

Those who owe more than their house is worth:

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property.   For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify.  The current value of your property will be determined after you apply to refinance.

Those with both a first and second mortgage:

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan.  Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

Interst rate and terms of the new mortgage:

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment.  All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate.

Those who are at risk of losing their homes:

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current.  By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

Those who are in immediate danger of losing their homes:

Contact your mortgage servicer or credit counselor.  Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility.  We support this effort.

Read the full post on the White House blog, there’s a ton of information there. It should answer a lot of your questions.

photo credit: aflcio2008

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MCLEAN, Va. (AP) — Government-controlled mortgage finance companies Fannie Mae and Freddie Mac said Friday they have immediately suspended all foreclosure sales involving occupied single-family and 2-4 unit properties through March 6, to give troubled borrowers more time to work with loan servicers to avoid losing their homes.

J.P. Morgan Chase, Citigroup and Bank of America have also placed a moratorium on foreclosures. From the Wall Street Journal:

WASHINGTON — J.P. Morgan Chase & Co., Citigroup Inc. and Bank of America Corp. have committed to weeks-long moratoriums on foreclosures as the government works on a financial stability plan slated to include billions of dollars aimed at keeping people in their homes.

“We will not add to the foreclosure process any new owner-occupied residential loans that are owned and serviced by J.P. Morgan Chase,” the company’s chief executive, Jamie Dimon, said in a letter Thursday to Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee.

Sorry for the late breaking news. I mean late in the literal sense!

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