Highlights

• To collect either tax credit, homes must be under contract by April 30.
• “The first thing they need to do is make sure they can get a mortgage.”
• Insurance premiums on FHA loans increase after April 2.

There are two homebuyer federal income tax credits: the first-time homebuyer tax credit of up to $8,000, and the move-up homebuyer tax credit of up to $6,500. Both come with deadlines.

To collect either tax credit, buyers have to have homes under contract by April 30. That means that both buyer and seller must have signed the purchase contract by that date. After that, there’s another deadline: The transaction has to close by June 30.

Below is a timeline for homebuyers who want to complete the transaction on time to collect the federal income tax credit. The following dates aren’t ironclad; the real estate agent, lender and title company will know if you need to deviate from this timeline because of your situation or location. Use this timeline as a general guide and as motivation to take action quickly.

Above all, let everyone — from the lender to the seller to the inspector — know about your deadlines

Compliments:

Chad E. Bahnsen

What does it all mean?The new guidelines will be extended to:

Repeat home buyers…
Current home owners that are looking to purchase a new home are eligible for the credit as well! To qualify as a repeat home buyer, you must have owned and lived in your current residence for 5 consecutive years. Now these home buyers can receive a credit for up to $6,500 or 10% of the cost of the home. The new home does not have to be more or less expensive than your current home. The same income limits apply as for first time home buyers.

The fine print..The fine print.. For both credits,

• The homes purchased must be less than $800,000.
• The credit is refundable, meaning it will be issued as a check to you if your tax liability is less than the refund.
• The new extension cannot be applied retroactively; for example, it cannot be used if a home was purchased before November 6, 2009 and the owners did not receive the credit because of the old income limits.

According to Victor Burek of Mortgage News Daily:

Low housing prices and low mortgage rates are not enticing new buyers to market yet.   With the purchase applications index showing disappointing numbers, you would think this would be bad for stocks; however, the futures market is pointing to a positive open.  Less home purchases will lead to less buying of furniture, flooring, appliances, etc… which will continue to keep retail sales numbers down.  In related news, Home Depot reported a 9.7% drop in first quarter sales while Lowes posted better than expected numbers and gave an optimistic outlook.   Chief executive officer for Home Depot gave a less than optimistic outlook due to the rising amount of foreclosures especially on the west coast.  It is going to be difficult for our economy to grow until the housing sector starts to see some improvement and foreclosures show a steady decline.

Early reports from fellow mortgage professionals are indicating lenders rate sheets to be very similar to yesterday’s.  This will keep the par 30 year conventional rate mortgage in the 4.625% to 4.875% range for the best qualified consumers.

With mortgage rates at the lowest rates in three years, now is definitely time to refinance if one has the equity to do so.

It’s official…Can you believe it…Countrywide is no longer….The most recognizable name in mortgage lending, will no longer operate under the name Countrywide….but under it’s parent name Bank of America. With their Clarity Commitment they are reinforcing responsible lending…again…

According to Market Watch

The Clarity Commitment is a simple one-page summary in straightforward language designed to make it easier for customers to understand terms of their loan. The summary includes information regarding interest rate, monthly payment, payment terms, and an explanation of closing costs and other loan information. Provided both at application and at closing, the Clarity Commitment document is available on most new purchase and refinance transactions, including traditional and government-backed loans.

The end of an era….and the beginning of a new one…Responsible lending….What a novel concept!

Just when I thought I had the 2008 First Time Homebuyer credit figured out, here comes a 2009 First Time Homebuyer credit that is better than the 2008 Credit…If you bought in December, 2008, I feel your pain! The 2009 credit is up to $8000 and never needs to be paid back…Contrast that with the 2008 credit of $7500 to be paid back over 15 years…Timing is everything! For more details on the American Recovery and Reinvestment Act of 2009, go to the IRS website . New details are emerging every day.

The election is over…phones will stop ringing, and it is time to focus on the economy and on our spending patterns– Protecting ourselves…and trying to deal with items like Upside Down Mortgages and how to survive this change….I’ll be posting tidbits over the next few weeks to help people deal with the problems they face…
The first problem I am hearing about is upside down mortgages and how to refinance…and get payments manageable in these times…
JP Morgan Chase has announced some innovative programs to attempt to avoid foreclosure.

J. P. Morgan Chase & Company has announced that it will make its own contribution to stemming the tide of foreclosures sweeping the country by modifying around $70 billion of its owned mortgages that are in or nearing default.

The bank’s efforts will focus on restructuring loans for borrowers who are at risk of foreclosure and it has placed a 90 day moratorium on all foreclosures in order to put guidelines for its program in place. The company will hire and train an estimate 300 additional loan counselors (it currently employs about 2,500) and open two dozen new regional counseling centers.

The company has targeted 400,000 families for the rescue program. This is in addition to what it claims are 250,000 families which have already been helped in the earlier restructure of some $40 billion in loans.

The bank is also a major servicer of loans owned by others. Its own mortgages account for only 20 percent of the total portfolio it controls. (The Wall Street Journal pegs the number at only 4.7 percent.) The restructuring program will not, at least at present, apply to those serviced mortgages however it hopes that eventually the initiative can be expanded to include some of the investor owned loans.

The Chase program joins one previously announced by the Federal Deposit Insurance Corporation (FDIC) for the assets it has taken from the failed IndyMac Bank which was a major player in the mortgage industry. Bank of American has also started a modification program as did Wachovia Bank shortly before it was taken over by Wells Fargo Bank.

(source Mortgage News Daily

If you are not a Chase customer…call your banker, find a broker, and see what can be done…The options are endless…You do not need to lose your home.

The FHA has announced some plans too…including the HOPE for Homeowners Program, FHA secure, and a few other options to help you through the process….
You are not alone….
If you need help in understanding your options, give us a call….we’ll be glad to help…..If your lender is currently not participating in one of the programs you may need a lawyer or a broker to help you…But, the time is right and now!