Saturday, February 28, 2009

Home Tax Credit Explanations

American Recovery and Reinvestment Act is a tax credit of up to $8,000 in 2009.

The new credit is designed to boost sales in the nation's sagging housing market. Lawrence Yun, chief economist for the National Association of Realtors, predicts homebuyers will purchase an additional 300,000 homes in 2009 as a result of the tax credit.

The new credit improves on a first-time homebuyer credit passed in 2008. That credit had to be paid back over a period of 15 years, making it more of a loan than a true credit. This year's tax credit will certainly have a bigger impact because it is a true tax credit which is also refundable. For instance, if you owe $1,000 in taxes and qualify for the first-time homebuyers tax credit, (not owning a home for the past 3 years), you will receive a tax refund of $7,000.

Rules for 2009 first-time homebuyers tax credit
*Does not have to be repaid unless the home is sold within three years.
*Applies only to first-time homebuyers, defined as those who have not owned a home within the previous three tax years.
*Available only for homes purchased between Jan. 1, 2009, and Dec. 1, 2009.
*Restricted by income; phases out for individuals with an adjusted gross income of $75,000 or above and for married couples with a combined adjusted gross income of $150,000 or above.
*Tax credit is for up to 10 percent of the purchase price, up to a maximum of $8,000. For example, a buyer of a $150,000 home could receive a tax credit of a maximum of $8,000, while a first-time buyer of a $70,000 home would be eligible for a tax credit of $7,000.
*The credit can be taken on 2008 taxes even when the purchase is made in 2009.
*The greatest part of this tax credit is that homebuyers can take the credit on their 2008 tax return even when they have purchased the home in 2009. This acts as an immediate stimulus for a lot of people.

Homebuyers can take advantage of this tax filing in one of three ways...

1. Closing on the home prior to December 1, 2009,

2. Getting an extension to file taxes later in the year

3. Or filing an amended return.

*Some state housing programs are introducing programs that allow homebuyers to access the tax credit money at settlement.

This information was provided by Lawrence Yun, chief economist for the National Association of Realtors

Click on link below to view Form 5405 to attach to your 1040 Returns:

f5405.pdf

Friday, February 27, 2009

Funny You Tube Video on Finding a Home!

Watch all the way to the end! This is a classic...


Thursday, February 26, 2009

Oklahoma Foreclosure Information
2008 news headlines and reports have bombarded us with foreclosure stories. The rate of foreclosures in central Oklahoma has increased substantially, but it has also created significant opportunities for Oklahoma real estate investors/owners. Though it's not for the faint of heart... investing in foreclosed Oklahoma properties can prove profitable for those willing to put in the required research, work and investment.
As APRs (adjustable interest rates) rise, and jobs are lost...more Oklahoma homeowners are falling into foreclosure. This is prompting the wave of bargain-hunting investors/owners now looking to Oklahoma courthouse auctions, (sheriff sales), and repossession lenders, (REOs), across the country. The process usually begins when Oklahoma mortgagees fall three months behind on payments. The lender sends a default notice to the Oklahoma homeowner and to the county where the home is located. If the homeowner can't pay up, a foreclosure date is set. County officials in Oklahoma handle the auction and use the proceeds to pay off the mortgage and any other debts secured by the house. Leftover money goes to the foreclosed homeowner; left over debt may become the new owner's responsibility. In many cases though, it is the property's first mortgage in default, in which case subordinate liens are eliminated in foreclosure. But watch out for exceptions! Title fees, tax liens, utility bills, etc. may need to be paid off by the new owner.
The condition of foreclosed properties in is improving in many central Oklahoma markets as more higher-end homes end up in the possession of banks and other lenders. Buyers are likely to be consumers rather than investors since many homes are near move-in condition at the time of sale. Besides looking to sheriffs sales and REO lenders, another source of foreclosures is the federal government. The U.S. Department of Housing and Urban Development has inventory of foreclosed properties.
Buying and selling foreclosures costs you dollars. You buy a house, fix it up and hope you can resell it or rent it quickly. What that means for you as the owner is that you may not need to quit your day job after all. It's possible to work and renovate, although it is often exhausting to moonlight as a "flipper". As the new owner of the foreclosed home, you can be proud that you were able to purchase at a discounted price with the right cash down, a good banker and the right Realtor.

Wednesday, February 25, 2009

Bad Credit Can Ruin An Opprotunity to Purchase Your New Home

Bad credit or low credit scores can keep you from purchasing a home. Realtors try to educate prospective buyers to plan ahead, when thinking of moving. Financing rejections will bust your offers to purchase and high interest rates will make for very unhappy buyers, on what should be a great time of life.

Realtors encourage buyers to pre-qualify for a loan before looking for a new home. Even better than a Pre-Qualification Letter is a Letter of Commitment. Lenders will provide LOC only after all required applications and supported documentation, (W-2, tax returns, etc.), are approved through the lenders underwriters.

So first, plan ahead. Buyers would be best served by knowing their credit scores before attempting to purchase, so that the best interest rate possible can be obtained. Mistakes on credit reports can result in denial of loans. Fortunately, consumers rights are protected under the Fair Credit Reporting Act. This act gives consumers the ability to correct, update, amend and take action regarding the contents of a credit report. Credit bureaus report the information they are given by creditors, which are not verified. When an error occurs, the burden rests on the consumer. Disputing or correcting the errors require knowing what the problem is... writing a detailed letter explaining problem, and provide documentation supporting the discrepancy. So, checking your credit report for accuracy is available for free at
www.annualcreditreport.com

HB 1473 Passed for Agricultural Use inside City Limits

10 Acres or More for Agricultural Use
My customers have asked me about zoning issues inside of city limits. House Bill 1473 exempts 10 acres or more of land to be used as Agricultural use even though the city may restrict this type of use.

Read House Bill Summary Link