Archives for January 2010

Waiting to purchase a home until spring could cost buyers lots more money!

Dont wait to purchase a home! Waiting will cost you $$$ Thousands More This Spring.

First time home buyers can get a tax credit for UP to $8000.00 with a binding contract dated before April 30, 2010.

Also established is a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence on or before April 30, 2010. Qualified long term home owners must have owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, both spouses are required to have lived in the in the home for atleast 5 years with this being confirmed by reviewing the homeownership history. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each.
One plus is that repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

Now on to more changes in the works..that could add up at the closing table. The Housing and Urban Development (HUD) is to implement several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board’s mortgage backed securities purchase program (which has kept home loan rates low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these “seller concessions” can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead – Call or email me so I can help you not only find the home of your dreams but to also help you save money.

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