Archive for the ‘First-time home buyer tax credit’ Category

The spring market is here!  My phone has been ringing and my email has been busy!  I am fielding inquiries from both buyers and sellers – going on listing appointments and scheduling showings.  One thing I’ve noticed – year after year – is that buyers are always ready before sellers. 

While I am going on listing appointments, many potential sellers are waiting to put their houses on the market.  But the buyers I am speaking to are more than ready to get in the car and look at what’s on the market!

The home buyer tax credit is definitely fueling some of this activity, but I can’t attribute it all to the credit and I do wonder how much of a drop off we might have come May 1st when that window closes.  But that is more than three months from now! 

If you are considering putting your home on the market and sooner rather than later doesn’t interfere with your other plans or goals, then I would give serious thought to putting the house on the market now.  Before the sellers who are waiting to come on the market increase the inventory on April 1st!

If you are considering a move into or out of Basking Ridge, please contact me for a buyer consultation or a market analysis of your current Basking Ridge home.  Visit my site to search Basking Ridge Real homes for sale – whether you are looking for a condo, a single family home or a luxury property.  I’m happy to help!

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January 4, 2010 

The final two weeks of December have not been kind to mortgage rates. Stronger than expected economic data, comments from Fed officials, and a stock market rally all were negative for mortgage markets, and mortgage rates moved higher during the period.

Heading into December, mortgage rates were close to record low levels, but a combination of factors caused them to increase throughout the month. First, an improving economic outlook, which is good news for the country, is negative for mortgage markets because it generally leads to higher inflation. Second, the government already will need to issue an enormous amount of debt to pay for its spending, and it now looks more likely that additional expenditures are on the way for job creation and health care bills. Higher yields are required to attract investors to purchase the extra debt, pushing up yields for competing investments such as mortgage-backed securities (MBS). Finally, the Fed is winding down its $1.25 trillion MBS purchase program, reducing demand for mortgage investments.

With mortgage rates that are still historically low, high levels of affordability, and the homebuyer tax credit, the housing sector outlook for 2010 is for improvement from 2009. According to projections from the Mortgage Bankers Association (MBA), sales of existing homes are expected to increase by more than 10% next year. In addition, housing starts will rebound sharply from extremely low levels, and median home prices will move a little higher. Forecasts from the National Association of Realtors (NAR) and from Fannie Mae are generally consistent with the outlook from the MBA.

The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, the ISM manufacturing index will be released on Monday. Pending Home Sales, a leading indicator for the housing market, will come out on Tuesday. ISM Services and the minutes from the December 16 Fed meeting will be released on Wednesday. Construction Spending and Factory Orders will round out the schedule. In addition, the Treasury will announce the size of upcoming auctions on Thursday.

Copyright @ 2010 MBSQuoteline

At the date of this printing all information is deemed reliable but not guaranteed.  This publication is a service to our clients and friends.  It is designed only to give general information on the topics actually covered.  It is not intended to replace tax, legal or financial advice, for which you are encouraged to seek a competent professional advisor. 

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Many times when working with people looking to purchase in the Basking Ridge, NJ area I encounter buyers who are getting help from their family to buy their first home.  I wanted to make sure that you have all the information you need to make the best decision about this very important investment!

Buyers who purchase a property with someone else may wonder about their ability to claim the homebuyer tax credit. The Internal Revenue Service (IRS) recently issued tax credit eligibility guidelines for co-borrowers purchasing a home.

One of the most commonly seen situations is when a parent co-signs their child’s mortgage and both names appear on the note. If the parent owns a home, they are not eligible for any portion of the credit. However, if the home-buying child has not owned a home in the previous three years and meets the other requirements, he or she can qualify for the full $8,000 first-time buyer tax credit.

In other cases, unmarried individuals purchase a home to live in together. If only one of the co-borrowers meets all of the requirements, the eligible buyer may claim the full tax credit.

Click here to visit the homebuyer tax credit section on the IRS Web site.  You can also contact me directly for additional questions.  Click here to start your search in Bedminster, or here to start your search in Basking Ridge.  I also cover surrounding areas and have contacts all over the state for areas in other counties.

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Just like there are many types of buyers — from investors to first timers — there are also many different types of homes available for purchase. Certain buyers choose a multi-family home so they can earn income renting out the second unit or if they want to live close to a relative, but not share a living space.

Because the law states that a buyer must use their new home as a principal residence in order to claim the tax credit, those considering a two-family dwelling may wonder if they are eligible. According to the Internal Revenue Service, these buyers may qualify for the tax credit for the unit they use as their principal residence, but cannot claim the credit based on the full purchase price.

To figure out the amount of the tax credit that can be claimed, a buyer must divide the purchase price of the home between the two units. The allowable tax credit would then be 10 percent of the portion of the total purchase price that was allocated to the unit used as a principal residence by the buyer. The maximum credit amounts of $8,000 for first-time buyers and $6,500 for repeat buyers still apply.

Click here for more information about the tax credit.  Or contact me directly for additional questions.

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These frequently asked questions have been taken directly from the NAR Government Affairs Division website.

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No; Individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.  So will homeowners who are downsizing.

Question: I am an existing homeowner.  On October 25, 2009, I signed a contract to purchase a new home.  I have lived in my current home for more than 5 consecutive years and am within the new income limits.  I will go to settlement on November 20.  Will I qualify for the new $6500 credit?

Answer: Yes. The exiting homeowner credit goes into effect for purchases after the date of enactment (when the bill was signed – November 7th, 2009.  There is no reference to the date of contract for the new credit. T he provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first-time homebuyer who was not within the income limits at the time I entered into my contract to purchase on October 30, 2009.  Since the limits have changed, am I eligible for the credit even though I have already closed on my purchase?

Answer: Yes. the new income limitations went into effect as soon as the President signed the bill.  The income limit and other eligibility rules will look to your status as of the date of the purchase. 

Question: I am an eligible existing homeowner.  I have a fair amount of equity in my home.  I have found a home with a non-negotiable price of $825,000.  Will I be able to use any of the $6500 credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above the $800,000 makes the home ineligible for any portion of the credit.  The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago and have been renting since.  If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other  eligibility tests?

Answer: Yes.  Becuase if you lived in the home for mor than 5 consectutive years of the previous 8, you will qualify fo rhte $6500 credit.  For example, say John and his wife bought a home in 2000 and lived there until 2008 when they got a divorce. Whether John has been renting or has bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consectutive years out of the last 8 years.  The keyword here is “consecutive.”  As long as he lived in that house for 5 years straight what he did in the last 3 years does not impact eligibility.

Question: I am an eligible first-time homebuyer.  I entered into a contract to purchase on November 1, 2009.  Do I have to go to closing before December 1?  How does the extension date affect me?

Answer: You do not have to close before December 1.  Once the legislation was signed, the November 30 date disappeared.  SO, as long as the contract settles before June 30, 2010, the purchaser will be eligible for the credit.

If you have other questions that aren’t covered here, please, by all means, call me at 908-432-0318 or email me at jennifer@jenniferblanchard.com.  All inquiries are confidential!

If you are ready to start looking, click here for information on homes for sale in and around Basking Ridge, NJ.

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I had to update this post to acknowledge and celebrate the fact that it is the ONE HUNDREDTH post for the blog at www.Basking-Ridge-Real-Estate.com!!!

10/31/2009 – 11/06/2009

The following 6 properties went under contract this past week in Basking Ridge (twice as many as last week!):

124 Smithfield Court, Spring Ridge Condo listed for $289,900
224 Arrowood Way, The Cedars Townhouse, listed for $360,000
11 Fairbanks Lane, The Barons Townhouse, listed for $449,999
49 Spencer Road, Single Family Home, listed for $459,000
36 Dorchester Drive, Townhouse in The Hamiltons, listed for $482,625
2 Raleigh Court, Townhouse in The Hamiltons, listed for $524,000

There are an additional 9 properties that are working through attorney review (all under $650,000) which means they have accepted offers and lawyers are working through the contract details. 

Please contact me if you would like more information about any of these Basking Ridge homes or visit my Basking Ridge real estate site for more information on what has sold by month over the past year.

New to the Basking Ridge market are the following 6 properties:

436 Penns Way, Society Hill Townhouse, listed for $314,900
81 Constitution Way, Townhouse in The Hamiltons, listed for $525,000
23 Hampton Court, Half Duplex in Spring Ridge, listed for $575,000
165 Smoke Rise Road, Single Family Home in the Hills, listed for $709,900
3 Barton Way, Amherst Mews Townhouse, listed for $849,900
22 Royal Oak Drive, Single Family home, listed for $1,949,000

As of this morning there a total of 171 listings showing active in Basking Ridge in the MLS. With 34 going under contract in the last 30 days, Basking Ridge market absorption is 5 months.  The absorption rate has been decreasing quite steadily; I have to attribute this to listings expiring or coming off the market for the holidays as much as I can say it’s because there are buyers out there.  There ARE buyers out there – between 30 and 36 on a rolling 30 day basis – but there are also many listings that are simply coming off the market. I am SURE we will see a surge of “new” listings after the first of the year.  Some of these will be new to the market and some will be returning to the market after not selling this past 6-12 months.  Pricing is going to be key for these properties.

A note to sellers who are considering waiting until after the new year:  The first time home buyer tax credit was extended AND it’s been expanded to include repeat buyers so if you list now, you may capture people moving up from a condo or a townhouse into your single family home.  Buyers have to be under contract by April 30th to qualify. I do not think the winter market is going to slow down. If you wait until March you will miss anyone looking to capitalize on the credit.  Just something to think about!

Visit my Basking Ridge website to search homes for sale in Basking Ridge and surrounding areas.

If you are thinking of moving, I can provide a free market analysis of your home’s value  in today’s market.

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I always tell my clients that “I sell houses, not loans” and direct them to my favorite Weichert Financial Services manager – Brian Wagenseller, who can be reached at 908-310-5122.  Brian sent out a newsletter this afternoon so I thought I would share some highlights of available mortgage options:

State bond programs (not available in every state)
- Very popular programs.  Loan amount limits and downpayment requirements vary.
- NJ, PA, VA and MA have monetized the tax credit to be made available at closing.
 
FHA financing
- As little as 3.5% down.  Loan amounts up $729,750 in certain areas.
 
VA financing
- No Money Down up to $417,000.
 
Conventional financing both conforming & jumbo
- Loan amounts up to $729,750

Home Improvement Financing
- An FHA 203(k) Mortgage enables buyers to combine purchase and renovation financing
- Jumbo Financing up to $1,750,000
- Fixed Rate Bi-Weekly Payments and Various ARMS Available
 
Super Jumbo financing – Unlimited Maximum Loan Amount
- Provided to high net worth borrowers.  Guidelines vary by client profile.

Reverse Mortgages
- 62 and older
- No income or credit qualification
- No monthly payments
- Available for purchases (great for Seniors considering downsizing)

Feel free to contact me or comment about this information, but remember: I sell homes, not loans, so I might not be your best resource.  However, I can be your connection to the resource!

If you are ready to get started, you can sign up for daily or weekly listing alerts of Basking Ridge homes for sale.  You have six more months to take advantage of the tax credit!

This week’s market activity will be posted tomorrow evening.

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***FINAL UPDATE***: President Obama signed the extension today!!  

The law extends unemployment benefit insurance as well as the tax credit for first time home buyers and adds a credit for repeat buyers.   Income thresholds have been raised and the deadline to be under contract has been extended through April of 2010 – transactions must close by June 30, 2010

Military personnel get extra time – they can still take advantage of the credit when they return home.

Senate Approves Extended U.S. Homebuyer Tax Credit

By Brian Faler

Nov. 4 (Bloomberg) — The U.S. Senate approved a $45 billion plan to expand a tax credit for first-time homebuyers, extend jobless benefits and provide tax refunds to money-losing companies.

Lawmakers voted 98-0 for the measure, sending it to the House, where Majority Leader Steny Hoyer of Maryland said in a statement it will receive a vote as early as tomorrow. The bill then would be forwarded to President Barack Obama for his signature.

The plan would be the first major extension of provisions in February’s economic stimulus plan. The $8,000 homebuyers’ tax credit, slated to expire this month, would continue until April 30 and be expanded to include people with higher incomes and some who already own homes. That would cost about $10 billion in the fiscal year that began Oct. 1, according to Congress’s Joint Committee on Taxation. 

The Treasury Department estimates that more than 1.4 million Americans have taken advantage of the homebuyer credit at a cost so far of about $10 billion.

Increased Credit

The Senate plan would allow homebuyers who have lived in their residence at least five years to receive a $6,500 credit. Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That is up from the current $75,000 limit for individuals and $150,000 for couples.

Those buying homes worth more than $800,000 wouldn’t be eligible for the credit. Those who sell their new home or stop using it as their main residence within three years would have to repay the credit. 

Last Updated: November 4, 2009 18:03 EST

(Excerpts taken from www.bloomberg.com)

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Last night I posted with a question mark – because I just wasn’t sure if the news about the tax credit was official.  Around 4:00 this afternoon, we received information from the NJ Association of Realtors (NCJAR) that clarified the buzz we’ve been hearing.  That message follows: 

“Within the past 72 hours, some misinformation regarding the extension and expansion of the first-time home buyer tax credit has been disseminated through various media outlets. As of today, no formal bill regarding an amended tax credit program has been passed. On Wednesday, October 28, 2009, Senate leaders reached a tentative agreement to extend and expand the federal first-time home buyers’ tax credit originally set to expire November 30. While the method for passage remains uncertain, the deal would extend the $8,000 credit for first-time buyers until April 30, by which point they must have sales agreements in hand. These buyers would have until June 30, however, to go to settlement. The agreement would also provide a $6,500 credit for current homeowners who purchase a new residence in this time frame. To qualify, the homeowners must have lived in their primary residence for five continuous years. Qualifying income limits would also be raised to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000. The Senate has not yet agreed whether the extension will be put up for a vote as its own bill or in conjunction with other legislation. Once it passes the Senate, the measure must be voted on by the House and signed into law by President Obama.”

Rest assured that I will keep you current on any information regarding the home buyer tax credit.  Check back frequently, or subscribe to my blog so the information comes right to you!  If you are considering a move, visit my webiste to search homes for sale in Basking Ridge.

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I post this with a question mark becuase I’m not 100% sure – but MSNBC is reporting tonight that the first time home buyer tax credit is being extended as well as expanded.  Key points include: Current $8,000 for first time home buyers will be available through June, 2010 (must be under contract before the end of April), reduced credit of $6,500 for repeat home buyers who have been in their current home for the last five years. There are income limits for both credits – the current credit starts to phase out at an income level of $75,000.

This could be a really good thing!  If you are considering a purchase, now just might be the right time to do it!  Prices are still down and interest rates are still near historic lows.  Our mortgage rep has indicated that rates will most likely go up after the first of the year.  Especially in March when the government stops buying the mortgage backed securities.

Visit my website to search homes for sale in Basking Ridge and the surrounding areas.

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