First Time Homebuyer Tax Credit Extended and Expanded

On November 6, 2009, President Obama signed a bill into law that immediately extended the popular tax credit program offering up to $8,000 for qualified first-time homebuyers (FTHBs) into the first half of 2010.

The bill also instantly expanded the program, offering up to $6,500 in tax credits for qualified repeat home buyers, swinging open the door for even more qualified homebuyers to take advantage of this valuable opportunity at a time when mortgage rates are still near historical lows.

First-Time Buyers: For FTHBs (defined as someone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title), the basic rules remain the same, with one important exception – higher income limits are now in place, increasing the pool of potential buyers eligible for the tax credit of up to 10% of the purchase price or up to $8,000. This is money that does not have to be repaid as long you stay in your new home for at least 36 months.

Single tax filers who earn up to $125,000 are now eligible for the total credit amount. Those who earn more than this cap (but less than $145,000) can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap (but less than $245,000) can receive a partial credit.

Repeat Buyers: The new homebuyer program offers an exciting new opportunity missing from the previous incentives – a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. This gives those who already own a qualifying residence some additional reasons to take advantage of lower home prices and interest rates and finally move up to the home of their dreams.

Important Deadlines: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.Get the FactsThere are other important rules and guidelines you must meet to qualify for this great opportunity. So, if you or someone you know has missed out on the first two home buyer tax credit programs in the last two years, don't wait.

Article Courtesy of Homes and Money Quaterly News

Benefits of a Short Sale for Lenders

A short sale can save lenders lots of time and money. It is estimated that for each house that goes into foreclosure the bank is spending around $50000+/-. When the lenders decide to sell a property on a short sale, the litigation and foreclosure proceeding are skipped and the cost of holding the property is shorten. When a property falls into foreclosure, the lenders have to find asset managers and real estate brokers to list and sell their properties. In a short sale the lenders do not have to find asset managers and real estate brokers to sell and list their properties. The process is cut down and although it looks like the lenders are losing money up front, they actually will be saving more money by selling a property early before foreclosure.

The most difficult part in a short sale is getting the approval from the lender, because they are usually bombarded by multiple files and don’t have the adequate staff to manage all their files. It will take some time but most lenders will come to terms with an offer and will usually accept the lesser amount owed. In the long run, lenders know that they will benefit more from the short sale.

Benefits of a Short Sale for Seller's

There are numerous benefits to the sellers, some benefits include:

Won’t affect credit score as much as a foreclosure. When the seller’s only option is to sell a short and not got into foreclosure their credit score is effective as much as a foreclosure. Most seller’s who sell their home as a short sales can regain a good credit standing within 2 years where as a foreclosure your credit can be damage for up to 7 years.

No deficiency judgment. In most cases the banks will not have a deficiency judgment for the seller’s after a sale. The loan is satisfied and recorded as that.

Live in home. As a seller you can still stay in your home until the sale of your home. In a foreclosure the lender will order the sheriff to evict a person out of their home. If a homeowner has missed a payment and believe they have run into a hardship and are unable to work out anything with their lenders, seek a real estate professional trained in managing and selling short sale homes so their homes can be sold in a timely matter before they fall into foreclosure.

Morally correct. Most individuals want to be able to stay in their home and pay for their mortgage but hard times are upon them so they are unable to make the payments. If they can pay for the bills, they would.

Short sales are not easy transactions and everyone involved with a short sale should have patience and understanding of the process and educate their clients about the process. When there is better understanding of the process, all parties will benefit from the outcome.

Benefits of a Short Sale

I encourage all people falling behind on their mortgage to always first speak and try to work with their lender to see if they will allow a loan modification or provide other options so that a homeowner can keep their home. If the bank’s options are not favorable to the homeowner and they cannot afford the payments and their home is worth less than owed, the next best thing is to sell the home in a short sale instead of letting go into foreclosure.

There are many benefits that the homeowner can gain instead of letting the home fall into foreclosure. Please see below the benefits of a short sale versus a foreclosure.

Benefits of a Short Sale

I encourage all people falling behind on their mortgage to always first speak and try to work with their lender to see if they will allow a loan modification or provide other options so that a homeowner can keep their home. If the bank’s options are not favorable to the homeowner and they cannot afford the payments and their home is worth less than owed, the next best thing is to sell the home in a short sale instead of letting go into foreclosure.

There are many benefits that the homeowner can gain instead of letting the home fall into foreclosure. Please see below the benefits of a short sale versus a foreclosure.

Short Sales - Part I

We are seeing more and more short sales these days and it is now a common sight nowadays. I want to educate the public and all those interested, about the process and benefits of a short sale to all parties involved in the transaction.

For those of you not familiar with short sales, I will explain what a short sale is in common everyday terms. A short sale is when a homeowner is selling his/her property for less than what is owed on the mortgage with the approval from the lender to take the lesser amount to satisfy the loan. In most cases the homeowner does not have to pay what is owed. By this time, the homeowner usually has exhausted all their other options in trying keep their home and is force to sell their property as a short sale instead of falling into foreclosure. I will explain and go into further details about the benefits of a short sale compare to a foreclosure later in another blog.

In order for a short sale to occur two things must occur: the home must be under contract (have a purchase agreement) and the lender must accept that discounted payoff amount.