March 27, 2010
“No!” you say. ”Impossible!” Well, apparently, it can be done. Even if you haven’t missed payments or aren’t in financial trouble. If you are one of the millions of people who are both underwater and have a really unattractive loan, the HARP program may be able to help. I know just a few of the details (like your loan must be owned by Fannie Mae or Freddie Mac), but Eric Nelson of Silicon Valley Funding knows them all. If you or a loved one find yourself in this situation, shoot him an email and see if he can help. If you just want to read up on it, click here.
March 27, 2010
California lawmakers have voted to extend a $10,000 tax credit for first-time homebuyers.
The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).”
March 27, 2010
As long as you haven’t owned your primary residence in the last three years, you are considered a first-time homebuyer. If you did own your primary residence, but it was outside the United States, you still qualify. For married couples, each spouse must meet this criterion. For two unmarried individuals purchasing a home, only one need qualify (and that one should claim the credit). The credit is worth 10% of the purchase price, up to a maximum of $8,000.
Because of changes to the homebuyer tax credit made in November 2009, long-time homeowners can now qualify for a tax credit as well. Homeowners who have lived in the same home as their principal residence for five consecutive years out of the last eight years can claim a tax credit of $6,500, if they choose to buy another home.
Some married couples are not eligible for the long-time homebuyer credit because the credit only applies to married couples where both spouses have lived in the same house together for five consecutive years out of the last eight years.
Long-time homeowners do not have to sell their current residence to qualify for the credit. They could buy a new home and keep the old home as long as the new home was used as their principal residence. They could then rent out the old home or use it as a second home.
Buy New Construction
Under both programs, as a first-time buyer or long-time owner you do not have to purchase an existing home to qualify for the credit. You can claim the credit on the purchase of a new home, as long as you have signed a legally binding construction contract by April 30, 2010, and occupy the home by June 30, 2010. The date of purchase for a new home is considered to be the date the homebuyer occupies the new home.
Make Sure You Qualify
Whether you’re a first-time homebuyer or long-time homeowner, you’ll have to meet the following criteria to claim the credit.
- You must be at least 18 and you must not be claimed as a dependent on anyone else’s tax return to qualify for the credit.
- You can’t purchase the home from a close relative, which the IRS defines as a parent, grandparent, spouse or child.
- The home’s purchase price cannot be higher than $800,000.
- Your income can’t be too high. This credit applies to single taxpayers with modified adjusted gross incomes (MAGI) up to $125,000 and married taxpayers with MAGI up to $225,000. Single taxpayers with income between $125,000 and $145,000 and married taxpayers with income between $225,000 and $245,000 are eligible for a reduced credit. (Just because you are in love doesn’t mean that a joint return is best for both of you. Check out Happily Married? File Separately!)
- Houses, condos, townhomes, co-ops, house trailers and houseboats are eligible as long as they will be used as the buyer’s primary residence. Thus, vacation homes, second homes and investment properties are not eligible for the credit.
- Some government employees serving overseas, such as members of the armed forces, have an additional year to qualify for the credit.
Claim the Credit
You’ll have to attach form 5405 to your return and you must file a paper return (no e-filing allowed). The IRS also requires you to attach your HUD-1 or other settlement statement (if one of these forms wasn’t involved in your purchase transaction, for mobile homes, a detailed retail sales agreement will suffice, and for new construction, a detailed certificate of occupancy will work). Make sure to sign whichever document you submit if it doesn’t already contain your signature.
Long-time homeowners must also attach their proof of long-term homeownership in the form of five consecutive years’ worth of property tax statements, mortgage interest statements or homeowner’s insurance statements.
For homes purchased in 2010 (before the 2010 deadline), homebuyers can claim the credit on either their 2009 or 2010 tax returns. Someone who purchased a home on April 30, 2010, would not have to wait until 2011 to claim the tax credit on her 2010 tax return; instead, she could file an amended 2009 tax return to get the credit sooner.
Unlike the 2008 tax credit of up to $7,500, which has to be repaid in 15 equal installments starting with the taxpayer’s 2010 tax return, the 2009 and 2010 tax credits do not have to be repaid unless you sell the home within 36 months of purchase. In that case, you would have to repay the entire credit.
Be sure to check with your own specifics with yur tax preparer!
Provided by Susan Reber of Mission Hills Mortgage Bankers.
March 17, 2010
I was wowwed! LEED Certified Platinum construction meticulously designed by Handel Architects. The development is called NOVE and it contains nine homes, each with outdoor space, direct connect parking (not a common garage), bright white modern finishes, private outdoor spaces and views and lots of bright sunlight.
My favorite features were the shiny orange epoxy garage floors and the completely real looking artificial grass in the “backyards.” That and the fact the solar panels are cleverly integrated into the curved roof design to catch more of that south sun.
These 3 and 4 bedroom homes are all designed on two levels and are well located on Guerrero between 21st and 22nd (where the Palm Broker used to be). Just the right place for a low-carbon footprint pedestrian lifestyle. Bargain priced at between 1.1MM and 1.6MM, but they seem to be going fast. the two top corner townhomes are already sold.
Please let me know if you want to take a look!
March 17, 2010
Susan Reber of Mission Hills Mortgage Bankers provided this great list of suggestions and I thought I would pass it along. Susan can be reached at email@example.com.
Most home buyers know little about the whole credit scoring process. Borrowers often find themselves at a loss when trying to find ways to upgrade their credit history. While credit repair is necessary for some, it’s not the only way to increase your credit score. Even if you have stellar credit, you can enhance your score through these steps:
Evenly distribute your credit card debt to change the ratio of debt to available credit. Let’s say you have a credit score of 665. If you have debt on only one card, and four additional credit cards with zero balances, evenly distributing the debt of the first card could move you closer to that ideal bracket.
- Keep your existing zero balance accounts open and active; not doing this means you lose the benefits of a long-term credit history and increase your ratio of debt-to-available credit. The bottom line is don’t close those old accounts!
- Keep credit inquiries to a minimum. Each inquiry into your credit history can impact your score anywhere from 2-50 points. When it comes to mortgage and auto loans, even though you’re only looking for one loan, multiple lenders may request your credit report. To compensate for this, the score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry, so try and stay within that time frame.
Remember, credit scores don’t change overnight; get the ball rolling at least three months prior to applying for home financing.
March 17, 2010
San Francisco was the # 1 pick, in front of Pittsburgh, Phoenix, Memphis, and Charleston WV.
I hope the Today Show’s expert Barbara Corcoran is right!
Therefore, the market data for February, as seen in the charts below, is of particular interest. While it’s unwise to make too much of one month’s data (a failing of many pundits), it is surprising how sharply February’s statistics indicate a strengthening market. That is not to say a double-dip isn’t possible — the state, national and world economies are still fragile — just that we are not yet seeing indications of one here in San Francisco. Those who have spent the last year waiting eagerly for further price declines have so far waited in vain. (For the record: according to the Case-Shiller index, home values in the 5-county SF Metro Area have increased 4 – 5% in 2009, but the city accounts for only a small percentage of those sales.) It will be interesting to see if the trends seen below continue, as spring gets under way — and what implications that might hold regarding price movements.