Homebuyers Are Taking Advantage of the Federal Housing Tax Credit This Year

November 2nd, 2009

This year is definitely the best time for homebuyers to purchase because virtually everyone is eligible for the 2009 federal housing tax credit. If you’re a first time homebuyer, there should not be anything restricting you from purchasing a home this year and qualifying for the credit. If you’ve purchase a home in the past, you still may be able to take advantage of this great opportunity.  According to the federal government, a first time homebuyer, in this instance, is anyone who hasn’t bought a home in the past three years. If your home has been in your name for over three years, then you have the opportunity at this point to sell it and buy a new one with the help of the 2009 federal housing tax credit.

The housing credit stipulates that you can only receive a credit of 10% of the cost of your house up to $8,000. That amount if the total amount you can receive for the credit regardless of how much your home may cost. If you buy a home for $250,000, you will not receive a $25,000 tax credit, but rather an $8,000 credit. At the same time, however, you may not receive that entire $8,000 if you purchase a home for a very low price. If you purchase a home for under $80,000, you will not receive the full $8,000 in tax credit. Instead you will receive 10% of the purchase price of the home. If you are buying a home for $69,500, you will receive a $6,950 tax credit on your 2009 taxes. So whether you are buying an Arizona Mansion or a small condo, the credit is available for you to use!

Tax credits are traditionally used to pay for taxes that you owe to the federal government. For example, if you purchase a home for $80,000 and are eligible are the full tax credit of $8,000, you would traditionally use that amount to pay for taxes you owe at the end of the year. If you owe $8,000, then you and the government would simply call it even at the end of the year. It is possible, however, that you will not owe as much to the government as you should receive from your tax credit. If, for example, you only owe $6,000 in taxes, what will happen to the other $2,000 from your housing credit? These questions led the government to make the 2009 federal housing tax credit refundable. This means that you can be reimbursed for the tax credit money you don’t use to pay off other taxes. So if you only owe $6,000 to the government at the end of the year and are due to receive an $8,000 house credit, they will send you a check for the remaining $2,000. If you owe nothing on your taxes at the end of the year, you will receive a check for the full $8,000. For these reasons and many more, the year 2009 is truly the best time for you and other Americans to purchase a new home.

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New Doors and Windows Can Make Your Home More Beautiful

October 29th, 2009

One of the most important reasons why you should be considering new doors and windows for your home is because of the ability they have to make your home look more beautiful, inside and out. New windows and doors in Arizona are often used by designers, architects, and home remodelers when they’re trying to give a home an entirely new look. If you want an update, investing in these items will probably be the quickest way that you can create a completely new look. And because new windows and doors will make your home more beautiful, they can also increase the resale value later on if and when you decide to sell. In a real estate market like this where buyers have their pick of the litter, it’s important for you to make your home stand out above all the rest. You can achieve that goal with new windows and doors.

New windows can make your home look cleaner. It probably doesn’t surprise you that old windows can make a home look dated and dingy because of the mildew and dust that often collects in the panes. That mildew and dust can be incredibly difficult to clean, so many people don’t try. Because it is difficult to get to mildew and dust and window panes, there is typically a lot of buildup, making the frames and panes look that much older. With new panes made from a variety of dirt-resistant materials, you may never have this problem again. Vinyl is an especially popular, dirt-resistance product that many people are using to update their windows. Vinyl is specially formulated so that it will not easily harbor dirt and grime. This means that you’ll likely have a lot less cleaning to do, and whatever cleaning you have will be easier for you to accomplish.  Plus, they will make your Arizona Mansion look fabulous!

New doors have the ability to make the inside and outside of your home look completely brand new. Because there are so many doors that are involved in the building of your home, it’s natural that you should be able to choose among a number of different materials for your doors, such as traditional wood, fiberglass, metal, and recycled materials. In addition, exterior doors now typically come equipped with thermal cores inside that help keep the temperature of your house consistent and moderate, saving you money on energy bills each month.

With new doors, there are so many styles to choose from that you may not even know where to begin. This is why it’s important for you to know where you can turn for great and knowledgeable service. An experienced and reputable window and door installation company is the place for you to go to get all of your questions answered. Ask them what options you have for your home, what materials would be best for you to use in the area of the country where you live, and how you can taking advantage of the federal energy efficiency tax credit that’s going on now. You can receive a tax credit of up to 30% of the product cost of your windows and doors (not including labor costs) up to a maximum of $1,500.

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Understanding Real Estate Down Payments

October 29th, 2009

It should go without saying that buying a house always involves shelling out a down payment. As most buyers know, different lenders have different rates. In the distant past, most buyers had to settle for a whopping 20%-50% rate. That was until the housing boom that featured no down payments. Both high rates and no rates however are no longer very common these days.

If you insist on looking for no down payment loans, there is, to date, only one type of home loan around. This is known as the VA loan which is a type of loan that is guaranteed by the Department of Veterans Affairs. As the definition suggests, you can only qualify if you are a veteran, on active duty or the widow of someone who died because of a past or ongoing war.

Qualified individuals enjoy a few perks with VA loans. Income and credit score requirements are low. Even those who have at least two year old bankruptcy records may borrow as long as they have been up to date with credit payments. The mandatory mortgage insurance slapped on individuals who pay below 20% down payment is also waived in VA loans.

If you don’t qualify for a VA loan, you can always try to apply for an FHA insured loan. These require only a 3.5% down payment. An FHA loan has no income bracket ceilings so even those who do not belong to the low income category can apply. This type of loan however often best serves low income individuals. Like a VA loan, an FHA loan can be obtained even by those who have bad credit scores and records of bankruptcy. In the past, loan approvals relied on extremely strict home appraisal standards. These days though, appraisal guidelines have become more lenient.

Recently, FHA insured loans have risen in popularity. According to recent reports, FHA loans now make up 25% of all home loans. Lenders obviously feel more at ease lending cash when the loan is guaranteed by the government.

If you don’t qualify for either type of government insured loans, you have no other choice but to go for a conventional loan. Lenders differ on down payment rates that they demand. The rate can depend on the kind of property you are buying and your credit worthiness. In general though, most lenders require about 10% down payment. Based on reports, about two thirds of home buyers can afford this rate or more.

In some cases, down payment rates can go over 20%. This is especially if you choose to buy during a housing slump. Some buyers however may choose to willingly pay this amount. If you own 20% of the property you want to buy, you may be able to waive the mortgage insurance that is often added to monthly payments for down payments below 20%.

If you aren’t interested in a government insured loan, you can always shop for loans with down payment requirements in between 10%-20%. This may require a lot of research or the help of a reputable agent.

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When is it Time to Buy Your Own Home?

October 16th, 2009

Renting isn’t such a bad idea at all. When you don’t own the place, you can always decide to leave anytime and you don’t have to bother about long term property maintenance. Then again, renting can sometimes take the fun out of living. Privacy is often limited and you don’t have the power to decide on such things as wall color and fixture attachments.  (Article provided by Arizona Mansions, Luxury Homes, Real Estate & Condos)

If you want to be able to make decisions on your residence, there is no other option than to buy your own home. You should know though that purchase timing is crucial. There are good times and bad times to get a house. When is it the right time for you to get a place of your own?

The first point you would have to consider is real estate industry trends. Home loan rates, home prices and mortgages are never static. In fact, rates can vary within the day and from one company to another. There are however some general trends that can give you clues on when it is best to get a piece of property. Based on studies, surveys and official government reports, you can gather information on when mortgage rates and home prices are at their lowest.

Based on reports this year, the odds of getting good housing deals may be in your favor. Mortgage rates have dropped as low as 4%-%5 and foreclosures have increased, driving down house prices. This trend could change anytime soon though so you have to keep an eye on when figures start to rise.

Aside from general trends, you also have to look into financial circumstances. You have to ask yourself first if you can afford to buy your own home. This means more than just computing your possible monthly payment rates. It also means adding down payment costs, insurance, fees and taxes. On top of all these are your regular financial commitments such as monthly payments for other loans and monthly food and clothing budgets. Adding all of your expenses could surprisingly give you a figure you may not be able to afford. Needless to say, you shouldn’t get a place of your own if you don’t have a stable income.

Personal finances aren’t the only personal factor to consider. You also have to look at where you are right now in your life. If you are in a transition phase such as in the middle of a divorce or a job transfer, it may not be a good idea for you to get a new house. You are most likely uncertain at this point where you want to eventually live when the dust settles.

A transition phase that puts you in a new environment also means you may be unfamiliar with the neighborhood. It makes sense to get your bearings first and research on your new location before looking for a permanent residence.

Owning a home has and always will be part of the American dream. Don’t rush into the decision though. Before you dive into this complicated decision, you have to decide if it truly is time for you to buy a house.

Arizona Luxury homes & real estate blog

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Is Buying a Foreclosed House a Good Idea?

October 15th, 2009

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Getting a house these days is not always a piece of cake. Nonetheless, even if the economic crisis has left you with little to pay a house down payment with, there is still some hope left. You might just consider buying a foreclosed property.

Foreclosures are happening faster than expected. Official reports say that 2.5 million houses are already on track towards foreclosure. Florida leads the way having a 17.12% share in the foreclosure pie closely followed by Nevada and Arizona with 15.62% and 11.07% respectively. The government has become so alarmed that it launched the Neighborhood Stabilization Program last year with the intention of acquiring and rehabilitating foreclosed houses.

Although high foreclosure rates are generally bad for the economy, it isn’t entirely bad news for home buyers looking for affordable houses to call their own. Indeed, if you are struggling with steep down payment and monthly payment terms, foreclosed properties may be one of your best options. Clearly, lower prices are the top draw of foreclosed properties.

It should be clear though that there is more to consider with a home purchase than just the price. Buying a foreclosed house can have its disadvantages. Buying one in an auction for example means getting a house you haven’t seen or personally inspected. That means there is always a possibility of a property carrying defects or damages that aren’t easy to detect. Moreover, some previous homeowners may already have taken it upon themselves to strip their houses of furniture and even fixed appliances so they can sell these separately.

One other disadvantage to buying foreclosed houses is that you may be buying low only to pay higher in the end. Home buyers who are not very familiar with how foreclosures work may end up having to pay liens. In effect, the total cost of buying may be steeper than originally thought.

Actual foreclosure steps and terms may be complicated for some to understand. There are however some basic concepts that you should at least be familiar with. What happens first is that a homeowner defaults on payment. He will be sent a notice at which point he will still be given the chance to update his payments. If he is unable to do so, the house will enter the pre foreclosure phase. Some say this is an ideal time to buy because buyers can take advantage of the short sale in which lenders agree to sell property for less than the remaining balance.

Aside from pre foreclosure, you can also buy a house through auctions, government agencies or real estate companies. Often, properties that are being sold by real estate companies are the safest to buy. These properties however may have higher prices than those sold through other means because companies that have acquired them may now be interested in profiting.

It’s not necessary for you to know every technical detail there is about foreclosures. You should however have a solid grasp of essential concepts if you plan on buying foreclosed property.

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HAMP Giving Hope to Arizona Borrowers – Home Affordable Modification Program

October 2nd, 2009

Obama summed it all up when he said that the entire nation will have to pay the price for the home mortgage crisis. That was a statement released a few months ago as he unveiled government plans to assist borrowers facing foreclosure. Under the $75 billion Home Affordable Modification Program (HAMP), borrowers whose mortgage rates have increased can apply for loan modification. Servicer’s are tasked to reduce payments to 31% of borrowers’ pre-tax income. To date, 360,165 borrowers are under trial modification, a stage that is one step behind final modification.

According to reports, there are now more than 45 servicers who have signed up with HAMP. Signing up however is not the same as delivering results and the administration is putting greater pressure on servicers to step up the pace. HAMP’s target is to offer assistance to 4 million homeowners, with the first phase of assistance slated to be delivered to 500,000 homeowners by November of this year.

Servicers are feeling the heat but many have taken heed. Saxon Morgan now has 39% of its borrowers who are eligible for modification under trial modification. Nationstar Mortgage and GMAC Mortgage follow in second and third places with 30% and 26% of their eligible borrowers under trial respectively. Banking giant JPMorgan Chase is at fourth place with 25% followed by CitiMortgage at 23%. The figures may seem good enough but even the banks themselves feel the need to increase their efforts even more.

Borrowers have been somewhat critical of servicer’s and their efforts. There have been cases of applications lost or denied with no explanations offered and inquiries and follow up calls to servicer’s are sometimes left unattended. It’s tempting to assume that servicers are sitting on applications. There is reason to believe though that laxity may not be the only reason behind problems with servicers.

Taking into consideration the monumental task of assisting thousands of borrowers, banks need better resources and better guidelines for responding to borrowers’ needs. Servicers have been challenged to do more on their own but the government is not about to ignore its responsibility. On the government’s side some possible solutions are already underway. Standard codes may soon be issued to servicers to help quickly report and offer explanations for application denials. Applications themselves can be streamlined with new online options offered for applying and checking on applications.

For now, HAMP does seem to offer hope for millions of people facing foreclosure. From the looks of it though, it will take more than even the successful implementation of HAMP to solve the housing crisis. Millions of houses are still slated for foreclosure in the coming years and it is possible that government efforts will hardly put a dent on a severely bruised real estate market.

The administration admits that there are limitations to the kind of assistance it can offer. For now, the priority seems to be set on helping responsible homeowners first. Applicants are likely to receive application approval if they are able to keep as current as possible on loan payments.

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Real Estate Sales Health Send Mixed Signals

October 2nd, 2009

real-estateMarket analysts can expect an increase in sales to most likely mean improved health in any kind of market. Current real estate sales trends however seem to show mixed health signs. Obviously, selling houses still takes so much more effort than selling lemonade on the sidewalk.

A month ago, the market had reason to celebrate after August yet again marked an increase in sales of new houses. It seems the market for new homes is in a good route after five months of steady increases. Although August of last year still registered higher sales figures, sales from July to August this year rose to 0.7%.

It seems the improvement in market health can be pinned on low prices for smaller houses and low supply. With so much less to go around, people are starting to make a grab for the affordable options available. The median price saw a difference of $20,400 with the mid price dropping from $215,600 to $195,200. In addition, mortgage rates have also dropped settling at around 5.36% for a thirty year payment term. That’s .96% less than what it was last year. Not all regions however are enjoying high sales with mostly western areas registering a higher percentage of new homes sold.

On the flip side, sales of previously owned homes are not enjoying the same improvement in sales health. This is despite the fact that mortgage rates are down and tax credits are available until the first day of December of this year. Also, unlike the increase in demand for new homes that are in low supply, there is no similar increase in demand for previously owned houses that are also low in supply. Are buyers being pickier when deciding on which units to buy?

Although sales in August are 3.4% higher this year than last year at about the same period, August sales this year are 2.7% lower than July’s sales percentage. This is a disappointment considering the steady increase in sales in the previous four months.

The drop in percentages is far from being extremely distressing. The drop however is unexpected and there may be some cause for a little nervous anticipation. The drop came in the wake of a predicted increase in foreclosures this year. Foreclosed properties themselves help drive down median prices and luxury homes (as well as mansions) but the current drop in sales of previously owned houses may mean that there may not be enough buyers to catch the increasing load of foreclosed houses.

Mounting concerns also surround the expiration of tax credits at the end of this year. It is reasonable to assume that when the credits are no longer available, a further drop in buying trends may be expected. Some experts therefore suggest that the real estate market may significantly benefit if the tax credit availability were extended.

Obviously though, solutions for market movements are never as easy to come by. This is especially when trends do not follow expected patterns. Experts may prefer to wait and see if any positive developments are under way.

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