Before you consider a Short Sale be sure to contact your lender and any other agency that may be able to help you. Beware of anyone who approaches you to “solve your problems,” or charges you any fees. Use only a licensed realtor who gets paid only when the property is sold. There may be important tax considerations. Be sure to contact a qualified tax accountant to understand how they may affect you. As soon as you get a Foreclosure Notice... If you have missed any mortgage payments the lender will contact you to warn you of a possibility of foreclosure. You will usually be given the option catch up with your payments or perhaps to work out some kind of payment schedule. This is called the REINSTATEMENT PERIOD. If you are unable to do this you will get a notice in writing, usually from an attorney acting on the lenders behalf, warning of the foreclosure and the impending SHERIFF’S SALE.
The SHERIFF’S SALE is scheduled and there is a public auction for the property conducted at the Sheriff’s office or county courthouse. Usually it is the bank that wins the bid for the property. After the Sheriff’s Sale, in Minnesota, you usually have six months, called the REDEMPTION PERIOD, during which the mortgage needs to be paid in full either by refinancing, a cash payment or selling the property to satisfy the mortgage(s). You do not need to move until the end of the redemption period or the sale of the property. In many cases the only option is to either let the property go to full foreclosure or sell the property. It is often better for your credit to sell the property and satisfy the mortgage than to let the bank foreclose. However, in this market the odds are very high that the value of the property is less than the mortgage(s). That brings us to the SHORT SALE.
SHORT SALES
A SHORT SALE is when the bank agrees to take less than what is owed, and to allow the property to be sold at a loss. This way the lender removes a non-performing loan from their portfolio and lessens the risk of selling the property at even a greater loss after a foreclosure. Not to mention all of the carrying costs the bank may have during and after a foreclosure. The seller is then released from the loan with less damage to their credit than a foreclosure.
Short Sale Process
A Letter of authorization to release information is sent to the lender. This allows the realtor to talk to lender. The property is listed on the MLS for sale. A Short Sale Package is assembled and sent to the lender. This includes a hardship letter, a financial statement, monthly bills, debts, income pay stubs, tax forms, etc. The realtor sends this to the lender for review. An offer/Purchase Agreement is received. The lender reviews entire package, including the offer. The lender may negotiate terms or price of offer. The property is sold & the owner is released of debt liability.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/
Tuesday, March 17, 2009
Understanding the Short Sale Process
Before you consider a Short Sale be sure to contact your lender and any other agency that may be able to help you. Beware of anyone who approaches you to “solve your problems,” or charges you any fees. Use only a licensed realtor who gets paid only when the property is sold. There may be important tax considerations. Be sure to contact a qualified tax accountant to understand how they may affect you. As soon as you get a Foreclosure Notice... If you have missed any mortgage payments the lender will contact you to warn you of a possibility of foreclosure. You will usually be given the option catch up with your payments or perhaps to work out some kind of payment schedule. This is called the REINSTATEMENT PERIOD. If you are unable to do this you will get a notice in writing, usually from an attorney acting on the lenders behalf, warning of the foreclosure and the impending SHERIFF’S SALE.
The SHERIFF’S SALE is scheduled and there is a public auction for the property conducted at the Sheriff’s office or county courthouse. Usually it is the bank that wins the bid for the property. After the Sheriff’s Sale, in Minnesota, you usually have six months, called the REDEMPTION PERIOD, during which the mortgage needs to be paid in full either by refinancing, a cash payment or selling the property to satisfy the mortgage(s). You do not need to move until the end of the redemption period or the sale of the property. In many cases the only option is to either let the property go to full foreclosure or sell the property. It is often better for your credit to sell the property and satisfy the mortgage than to let the bank foreclose. However, in this market the odds are very high that the value of the property is less than the mortgage(s). That brings us to the SHORT SALE.
SHORT SALES
A SHORT SALE is when the bank agrees to take less than what is owed, and to allow the property to be sold at a loss. This way the lender removes a non-performing loan from their portfolio and lessens the risk of selling the property at even a greater loss after a foreclosure. Not to mention all of the carrying costs the bank may have during and after a foreclosure. The seller is then released from the loan with less damage to their credit than a foreclosure.
Short Sale Process
A Letter of authorization to release information is sent to the lender. This allows the realtor to talk to lender. The property is listed on the MLS for sale. A Short Sale Package is assembled and sent to the lender. This includes a hardship letter, a financial statement, monthly bills, debts, income pay stubs, tax forms, etc. The realtor sends this to the lender for review. An offer/Purchase Agreement is received. The lender reviews entire package, including the offer. The lender may negotiate terms or price of offer. The property is sold & the owner is released of debt liability.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/
The SHERIFF’S SALE is scheduled and there is a public auction for the property conducted at the Sheriff’s office or county courthouse. Usually it is the bank that wins the bid for the property. After the Sheriff’s Sale, in Minnesota, you usually have six months, called the REDEMPTION PERIOD, during which the mortgage needs to be paid in full either by refinancing, a cash payment or selling the property to satisfy the mortgage(s). You do not need to move until the end of the redemption period or the sale of the property. In many cases the only option is to either let the property go to full foreclosure or sell the property. It is often better for your credit to sell the property and satisfy the mortgage than to let the bank foreclose. However, in this market the odds are very high that the value of the property is less than the mortgage(s). That brings us to the SHORT SALE.
SHORT SALES
A SHORT SALE is when the bank agrees to take less than what is owed, and to allow the property to be sold at a loss. This way the lender removes a non-performing loan from their portfolio and lessens the risk of selling the property at even a greater loss after a foreclosure. Not to mention all of the carrying costs the bank may have during and after a foreclosure. The seller is then released from the loan with less damage to their credit than a foreclosure.
Short Sale Process
A Letter of authorization to release information is sent to the lender. This allows the realtor to talk to lender. The property is listed on the MLS for sale. A Short Sale Package is assembled and sent to the lender. This includes a hardship letter, a financial statement, monthly bills, debts, income pay stubs, tax forms, etc. The realtor sends this to the lender for review. An offer/Purchase Agreement is received. The lender reviews entire package, including the offer. The lender may negotiate terms or price of offer. The property is sold & the owner is released of debt liability.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/
FAKE HUD WEBSITE...BEWARE!
There is a deceptive website out there that is posing as HUD. This website tries to dupe people into giving out personal information (known as “phishing”) - and because they’ve made their site appear to be an “official us government website”, some people may fall prey to this scam.
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
FAKE HUD WEBSITE...BEWARE!
There is a deceptive website out there that is posing as HUD. This website tries to dupe people into giving out personal information (known as “phishing”) - and because they’ve made their site appear to be an “official us government website”, some people may fall prey to this scam.
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
The website is: http://bailout.hud-gov.us/
If anyone asks you about this website, advise them to stay away.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Monday, March 16, 2009
Suntrust Market Update
Thought for the week:
“The future belongs to those who believe in the beauty of their dreams.” Eleanor Roosevelt
Success Story:
Two brothers-in-law have a simple dream of starting a business and making $75 a week. They have a brilliantly simple marketing philosophy: one product served thirty-one different ways. Can you name them? Find the answer at the bottom.
In the News:
While it can’t be said that the U.S. economy has begun a recovery yet, there are signs of hope. According to the Economic Cycle Research Institute the decline in the annualized growth rate of our economy has slowed by 6% over the past six weeks. There is no recovery in sight, but the ECRI states ‘the up tick in its growth rate to a six-week high suggests the pace of contraction will slow in coming months’. This means ‘Good News’ could be on the horizon.
As stated in prior Market Updates, national real estate statistics are driven by numbers in Florida, Las Vegas, Arizona, California and Northern Virginia. On Friday, I spoke with a with Charlottesville resident vacationing at their 2nd home in south Florida. He told me about the opening of a new subdivision near his home with two model homes. The lots went on the market last Saturday, and cars were lined up for miles waiting to get into the area to view the property. His realtor had to cancel a couple of their planned golf outings, because he was too busy to get away. If this is a sign of that the Florida market is beginning to turn, it really is ‘Good News’.
Closer home, the Northern Virginia purchase market has heated up. Buyers are in the market and properties are moving. Our SunTrust Mortgage offices in Northern Virginia have full pipelines of purchase loans. Purchase applications have continued to increase in our office weekly as well. More importantly nationally applications for purchase mortgages increased 7.1% last week. If this trend continues, the media could jump on board leading to a change in the mindset of many future buyers. That would be ‘Good News’.
I would be remiss in not pointing out that potential buyers waiting for the right time should consider the facts above when considering how long they can afford to wait.
Market Update:
Global investors are constantly searching for opportunities that will provide the greatest return with the least amount of risk. As global financial markets struggled, many have searched for a safe haven in the U.S. financial markets. With the backing of the U.S. Government, investors view the Treasury and mortgage bond markets among the best opportunities resulting in an increased demand for U.S. investments such as mortgage backed securities. The increase in demand pushed prices higher and interest rates lower this week.
This week China’s Premier expressed concerns about the amount of investment his country has in U.S debt. This caused a panic in the bonds markets. The panic was quickly calmed, but uncertainties remain regarding the future of China’s continued involvement in future purchases. China is the largest foreign investor in U.S. debt. As we have stated often in our Market Updates, a reversal of this foreign demand could result in a spike to interest rates.
Potential buyers need to keep this in mind and understand that despite the efforts of our government, there are factors beyond their control that influence mortgage rates. Buyers should not assume today’s low interest rates will go unchanged in the future.
Let’s go get ‘em”!!
Interest Rates:
On Friday March 13th your purchase client with a 720 credit score putting 20% down could secure a conventional 30-Year Fixed rate at 4.50% with 1.125 points on a 30-day lock (APR: 4.634%).
FHA has established Risk Based Pricing with regards to credit scores. Borrowers with scores <660>719 will have a rate improvement. On Friday March 13th your FHA purchase client with a 660-719 credit score could secure a 30-Year Fixed rate at 4.750% with 1.0 point on a 30-day lock (APR: 5.368%). Remember the APR on FHA includes the MI.
Jumbo rates are subject to Risk Based Pricing with regards to credit scores. Borrowers with scores <740>759 will have a rate improvement. On Friday March 13th your Jumbo purchase client borrowing $1MM with a 740 credit score putting 25% down could secure a 30-Year Fixed rate at 5.875% with 1.250 points on a 30-day lock (APR: 6.008%).
(Burton Baskin & Irvine Robbins of Baskin-Robbins Ice Cream fame)
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
“The future belongs to those who believe in the beauty of their dreams.” Eleanor Roosevelt
Success Story:
Two brothers-in-law have a simple dream of starting a business and making $75 a week. They have a brilliantly simple marketing philosophy: one product served thirty-one different ways. Can you name them? Find the answer at the bottom.
In the News:
While it can’t be said that the U.S. economy has begun a recovery yet, there are signs of hope. According to the Economic Cycle Research Institute the decline in the annualized growth rate of our economy has slowed by 6% over the past six weeks. There is no recovery in sight, but the ECRI states ‘the up tick in its growth rate to a six-week high suggests the pace of contraction will slow in coming months’. This means ‘Good News’ could be on the horizon.
As stated in prior Market Updates, national real estate statistics are driven by numbers in Florida, Las Vegas, Arizona, California and Northern Virginia. On Friday, I spoke with a with Charlottesville resident vacationing at their 2nd home in south Florida. He told me about the opening of a new subdivision near his home with two model homes. The lots went on the market last Saturday, and cars were lined up for miles waiting to get into the area to view the property. His realtor had to cancel a couple of their planned golf outings, because he was too busy to get away. If this is a sign of that the Florida market is beginning to turn, it really is ‘Good News’.
Closer home, the Northern Virginia purchase market has heated up. Buyers are in the market and properties are moving. Our SunTrust Mortgage offices in Northern Virginia have full pipelines of purchase loans. Purchase applications have continued to increase in our office weekly as well. More importantly nationally applications for purchase mortgages increased 7.1% last week. If this trend continues, the media could jump on board leading to a change in the mindset of many future buyers. That would be ‘Good News’.
I would be remiss in not pointing out that potential buyers waiting for the right time should consider the facts above when considering how long they can afford to wait.
Market Update:
Global investors are constantly searching for opportunities that will provide the greatest return with the least amount of risk. As global financial markets struggled, many have searched for a safe haven in the U.S. financial markets. With the backing of the U.S. Government, investors view the Treasury and mortgage bond markets among the best opportunities resulting in an increased demand for U.S. investments such as mortgage backed securities. The increase in demand pushed prices higher and interest rates lower this week.
This week China’s Premier expressed concerns about the amount of investment his country has in U.S debt. This caused a panic in the bonds markets. The panic was quickly calmed, but uncertainties remain regarding the future of China’s continued involvement in future purchases. China is the largest foreign investor in U.S. debt. As we have stated often in our Market Updates, a reversal of this foreign demand could result in a spike to interest rates.
Potential buyers need to keep this in mind and understand that despite the efforts of our government, there are factors beyond their control that influence mortgage rates. Buyers should not assume today’s low interest rates will go unchanged in the future.
Let’s go get ‘em”!!
Interest Rates:
On Friday March 13th your purchase client with a 720 credit score putting 20% down could secure a conventional 30-Year Fixed rate at 4.50% with 1.125 points on a 30-day lock (APR: 4.634%).
FHA has established Risk Based Pricing with regards to credit scores. Borrowers with scores <660>719 will have a rate improvement. On Friday March 13th your FHA purchase client with a 660-719 credit score could secure a 30-Year Fixed rate at 4.750% with 1.0 point on a 30-day lock (APR: 5.368%). Remember the APR on FHA includes the MI.
Jumbo rates are subject to Risk Based Pricing with regards to credit scores. Borrowers with scores <740>759 will have a rate improvement. On Friday March 13th your Jumbo purchase client borrowing $1MM with a 740 credit score putting 25% down could secure a 30-Year Fixed rate at 5.875% with 1.250 points on a 30-day lock (APR: 6.008%).
(Burton Baskin & Irvine Robbins of Baskin-Robbins Ice Cream fame)
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Suntrust Market Update
Thought for the week:
“The future belongs to those who believe in the beauty of their dreams.” Eleanor Roosevelt
Success Story:
Two brothers-in-law have a simple dream of starting a business and making $75 a week. They have a brilliantly simple marketing philosophy: one product served thirty-one different ways. Can you name them? Find the answer at the bottom.
In the News:
While it can’t be said that the U.S. economy has begun a recovery yet, there are signs of hope. According to the Economic Cycle Research Institute the decline in the annualized growth rate of our economy has slowed by 6% over the past six weeks. There is no recovery in sight, but the ECRI states ‘the up tick in its growth rate to a six-week high suggests the pace of contraction will slow in coming months’. This means ‘Good News’ could be on the horizon.
As stated in prior Market Updates, national real estate statistics are driven by numbers in Florida, Las Vegas, Arizona, California and Northern Virginia. On Friday, I spoke with a with Charlottesville resident vacationing at their 2nd home in south Florida. He told me about the opening of a new subdivision near his home with two model homes. The lots went on the market last Saturday, and cars were lined up for miles waiting to get into the area to view the property. His realtor had to cancel a couple of their planned golf outings, because he was too busy to get away. If this is a sign of that the Florida market is beginning to turn, it really is ‘Good News’.
Closer home, the Northern Virginia purchase market has heated up. Buyers are in the market and properties are moving. Our SunTrust Mortgage offices in Northern Virginia have full pipelines of purchase loans. Purchase applications have continued to increase in our office weekly as well. More importantly nationally applications for purchase mortgages increased 7.1% last week. If this trend continues, the media could jump on board leading to a change in the mindset of many future buyers. That would be ‘Good News’.
I would be remiss in not pointing out that potential buyers waiting for the right time should consider the facts above when considering how long they can afford to wait.
Market Update:
Global investors are constantly searching for opportunities that will provide the greatest return with the least amount of risk. As global financial markets struggled, many have searched for a safe haven in the U.S. financial markets. With the backing of the U.S. Government, investors view the Treasury and mortgage bond markets among the best opportunities resulting in an increased demand for U.S. investments such as mortgage backed securities. The increase in demand pushed prices higher and interest rates lower this week.
This week China’s Premier expressed concerns about the amount of investment his country has in U.S debt. This caused a panic in the bonds markets. The panic was quickly calmed, but uncertainties remain regarding the future of China’s continued involvement in future purchases. China is the largest foreign investor in U.S. debt. As we have stated often in our Market Updates, a reversal of this foreign demand could result in a spike to interest rates.
Potential buyers need to keep this in mind and understand that despite the efforts of our government, there are factors beyond their control that influence mortgage rates. Buyers should not assume today’s low interest rates will go unchanged in the future.
Let’s go get ‘em”!!
Interest Rates:
On Friday March 13th your purchase client with a 720 credit score putting 20% down could secure a conventional 30-Year Fixed rate at 4.50% with 1.125 points on a 30-day lock (APR: 4.634%).
FHA has established Risk Based Pricing with regards to credit scores. Borrowers with scores <660>719 will have a rate improvement. On Friday March 13th your FHA purchase client with a 660-719 credit score could secure a 30-Year Fixed rate at 4.750% with 1.0 point on a 30-day lock (APR: 5.368%). Remember the APR on FHA includes the MI.
Jumbo rates are subject to Risk Based Pricing with regards to credit scores. Borrowers with scores <740>759 will have a rate improvement. On Friday March 13th your Jumbo purchase client borrowing $1MM with a 740 credit score putting 25% down could secure a 30-Year Fixed rate at 5.875% with 1.250 points on a 30-day lock (APR: 6.008%).
(Burton Baskin & Irvine Robbins of Baskin-Robbins Ice Cream fame)
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
“The future belongs to those who believe in the beauty of their dreams.” Eleanor Roosevelt
Success Story:
Two brothers-in-law have a simple dream of starting a business and making $75 a week. They have a brilliantly simple marketing philosophy: one product served thirty-one different ways. Can you name them? Find the answer at the bottom.
In the News:
While it can’t be said that the U.S. economy has begun a recovery yet, there are signs of hope. According to the Economic Cycle Research Institute the decline in the annualized growth rate of our economy has slowed by 6% over the past six weeks. There is no recovery in sight, but the ECRI states ‘the up tick in its growth rate to a six-week high suggests the pace of contraction will slow in coming months’. This means ‘Good News’ could be on the horizon.
As stated in prior Market Updates, national real estate statistics are driven by numbers in Florida, Las Vegas, Arizona, California and Northern Virginia. On Friday, I spoke with a with Charlottesville resident vacationing at their 2nd home in south Florida. He told me about the opening of a new subdivision near his home with two model homes. The lots went on the market last Saturday, and cars were lined up for miles waiting to get into the area to view the property. His realtor had to cancel a couple of their planned golf outings, because he was too busy to get away. If this is a sign of that the Florida market is beginning to turn, it really is ‘Good News’.
Closer home, the Northern Virginia purchase market has heated up. Buyers are in the market and properties are moving. Our SunTrust Mortgage offices in Northern Virginia have full pipelines of purchase loans. Purchase applications have continued to increase in our office weekly as well. More importantly nationally applications for purchase mortgages increased 7.1% last week. If this trend continues, the media could jump on board leading to a change in the mindset of many future buyers. That would be ‘Good News’.
I would be remiss in not pointing out that potential buyers waiting for the right time should consider the facts above when considering how long they can afford to wait.
Market Update:
Global investors are constantly searching for opportunities that will provide the greatest return with the least amount of risk. As global financial markets struggled, many have searched for a safe haven in the U.S. financial markets. With the backing of the U.S. Government, investors view the Treasury and mortgage bond markets among the best opportunities resulting in an increased demand for U.S. investments such as mortgage backed securities. The increase in demand pushed prices higher and interest rates lower this week.
This week China’s Premier expressed concerns about the amount of investment his country has in U.S debt. This caused a panic in the bonds markets. The panic was quickly calmed, but uncertainties remain regarding the future of China’s continued involvement in future purchases. China is the largest foreign investor in U.S. debt. As we have stated often in our Market Updates, a reversal of this foreign demand could result in a spike to interest rates.
Potential buyers need to keep this in mind and understand that despite the efforts of our government, there are factors beyond their control that influence mortgage rates. Buyers should not assume today’s low interest rates will go unchanged in the future.
Let’s go get ‘em”!!
Interest Rates:
On Friday March 13th your purchase client with a 720 credit score putting 20% down could secure a conventional 30-Year Fixed rate at 4.50% with 1.125 points on a 30-day lock (APR: 4.634%).
FHA has established Risk Based Pricing with regards to credit scores. Borrowers with scores <660>719 will have a rate improvement. On Friday March 13th your FHA purchase client with a 660-719 credit score could secure a 30-Year Fixed rate at 4.750% with 1.0 point on a 30-day lock (APR: 5.368%). Remember the APR on FHA includes the MI.
Jumbo rates are subject to Risk Based Pricing with regards to credit scores. Borrowers with scores <740>759 will have a rate improvement. On Friday March 13th your Jumbo purchase client borrowing $1MM with a 740 credit score putting 25% down could secure a 30-Year Fixed rate at 5.875% with 1.250 points on a 30-day lock (APR: 6.008%).
(Burton Baskin & Irvine Robbins of Baskin-Robbins Ice Cream fame)
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Monday, February 23, 2009
'Stimulus' and 'Stability' Equal Help for Homeowners
'Stimulus' and 'Stability' Equal Help for Homeowners
Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.
Stimulus Plan - Tax Credit for Homebuyers
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
While details are sketchy - we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
Homeowner Affordability and Stability Plan
President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.
Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.
Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.
The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.
Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.
Information was provided by Leonard Winslow of Gateway.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.
Stimulus Plan - Tax Credit for Homebuyers
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
While details are sketchy - we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
Homeowner Affordability and Stability Plan
President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.
Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.
Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.
The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.
Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.
Information was provided by Leonard Winslow of Gateway.
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com
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