Last Week in Review: The labor market continues to improve, and while that’s good news for our economy, what does it mean for home loan rates?
Forecast for the Week: Very impactful reports are in store for the week ahead - including a look at inflation, retail sales, and how American consumers are feeling these days.
View: Breaking news... you won’t need to sweat the dreaded April 15th date this year. Find out why below.
"Whistle while you work." Snow White. That’s something more people have been able to do lately, as the labor market continues to steadily improve. Here’s what December’s Jobs Report showed... and what it means for home loan rates.
The Labor Department reported that 103,000 jobs were created in December, and private job growth was 113,000. While these numbers were below the recently ramped up expectations, they do show that the trend in the labor market is improving. Also noteworthy are the upward revisions to the prior two months readings, showing 70,000 more jobs created than had been previously reported.
And yet, the real shocker in the report was a significant decline in the unemployment rate to 9.4%, which is the lowest unemployment rate since May of 2009.
So what did we learn from this Jobs Report?
1. While positive news, this Jobs number was still soft enough to support the Fed continuing on their plans for a full dosage of QE2 for the economy... and this won’t be good for Bonds and home loan rates, as it carries along some real inflation threat down the road.
2. The recent tax package and lower tax rate extensions have not yet had enough time to be seen or felt in the economy, so those factors should help provide further improvement in the labor market in future months... but also will create inflation - bad news for Bonds and home loan rates.
The bottom line for right now is that the familiar chant "Don't Fight the Fed" continues to ring true. The Fed is intent on creating inflation, lowering the unemployment rate and raising Stock prices...and they have already been somewhat successful. QE2 will likely keep coming until the employment picture improves significantly, and this is all going to be unfriendly for Bonds and home loan rates ahead.
So what should you do if you have been thinking about purchasing or refinancing a home? The good news is that home loan rates are still extremely attractive right now, so call or email me now to get started. Or forward this newsletter on to someone you know how may benefit from today’s historically low rates.
The latter half of the week ahead will hold the heavyweight economic reports. Be watching for:
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
As you can see in the chart below, Bonds and home loan rates ended the week about the same place as where they began...despite the tune of volatility that was in the air. Now would be a great time to call or email me if you have any questions about your situation!
Tax Deadline Extended!
But What If You Need More Time?
This year, instead of your tax filing being due on Friday, April 15, you’ll have a few extra days to complete and file your taxes. That means your tax filing isn’t due until Monday, April 18, 2011.
The three extra days have been added because of Emancipation Day, which is a little-known Washington, D.C. holiday that celebrates the freeing of slaves in the district. The holiday actually falls on Saturday, April 16 this year, but will officially be observed on Friday, April 15. As a result, the IRS pushed the filing deadline to Monday, April 18 - since the tax code states that filing deadlines can’t fall on Saturdays, Sundays or holidays.
Still Need More Time?
If you need more time to file your taxes, you can submit Form 4868 for a six-month extension. You can learn more about extensions on the IRS website.
Problems Paying?
But what do you do if you’ve completed your tax returns only to find out that you owe way more to Uncle Sam than you were expecting - or worse, that your tax bill is more than you can possibly afford to pay right now? Don't worry. If this is the case, you're not alone... especially in today’s economy. And, more importantly, you're not going to jail just for being a little short on cash.
Rest assured, the IRS only seeks criminal charges for those who the agency can prove intentionally chose not to file and pay taxes. So, even if you can't pay your bill right away, file your return on time, and not only will you stay off the IRS's bad side, you'll avoid some hefty financial penalties in the process.
Penalties and Interest Charges
According to the IRS, the penalty for filing late is generally 5% per month, or up to 25% of the total tax amount due. Not to mention interest charges, which the IRS changes quarterly, and which range between 4% and 9%. This interest applies to the unpaid balance, penalties, and to any interest that has been charged to the account as well.
If no effort is made to pay back-taxes, the IRS can impose stricter penalties, including levying bank accounts, wages, other income, or taking other assets like houses and cars. A Federal Tax Lien could also be filed, which could ruin your credit history for years to come.
The penalty for filing on time but paying late, however, is much lower. If you choose an installment plan to pay your debt, interest will accrue on the unpaid debt amount only. Therefore, when you file your return, pay as much as you can to help cut down the penalties.
Delayed Collection
If you absolutely cannot pay any part of your tax bill, the IRS may temporarily delay collection until your financial situation improves, although interest and penalties will accrue throughout this time. But this extension is reserved for what the IRS calls "significant hardship." Your best bet is to talk to a CPA or tax professional if you cannot pay any part of your tax bill.
Whatever you do, DON’T just ignore the bill and assume the government will forget about it. Assess the situation, seek help from a tax professional, and make a plan to address the situation.
Economic Calendar for the Week of January 10-14, 2011
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of January 10 - January 14
I hope you enjoyed a wonderful Thanksgiving weekend with friends and family. I know that I certainly have much to be thankful for, including many wonderful clients and friends like you.
As your Trusted Advisor, I sincerely hope you've been enjoying your complimentary subscription to theMortgage Market Guide Weekly. Your next full issue will arrive "hot off the press" next week. In the meantime, please enjoy the holiday article below.
The Mortgage Market Guide Weekly is the industry's leading publication of this type, and I'm pleased to provide this valuable resource to you. If you feel that any of your clients, friends, family members or associates would benefit from keeping up-to-date on market and economic trends with this easy-to-read format, please let me know, and I will be happy to add them free of charge.
Best wishes to you.
The Little Known – but true – History of Thanksgiving…
Despite the popular belief that Thanksgiving originated with the colony at Plymouth Plantation in 1621, researchers have actually pinpointed the actual first Thanksgiving to have been held a whopping 56 years earlier.
According to scholars, the first known Thanksgiving took place during September 1565, in Saint Augustine, Florida when Spanish settlers held a Mass of Thanksgiving after arriving safely in the new world. It wasn’t until 1619 when English settlers in the Virginia Colony held a similar day of thanks…and then two full years after that, the colonists at Plymouth Plantation celebrated the famed Thanksgiving of 1621.
But the story doesn’t end there.
Around 1789, President George Washington proclaimed “a day of thanks” to be observed. It was not an official national holiday, but it did become popular with many Americans, who would select their own state or city observance day, usually in the fall. But not everyone was in favor…there were people going through hardships who were actually against having a day dedicated for giving thanks. In fact, Thomas Jefferson himself scoffed at the idea of a thanksgiving day.
But most Americans liked the idea, and around the time of the Civil War, this day of thanks had become a very popular – yet unofficial – event. Magazine editor and writer Sarah Josepha Hale took up the cause, and wrote many editorials and letters to politicians about making an official “day of thanks.” (You might know Sarah yourself, from her epic poem, “Mary Had a Little Lamb.”) Her strong efforts paid off, and around the end of 1863, President Lincoln officially proclaimed a “day of thanksgiving” to be observed on the last Thursday of November.
But then in 1939, during the Great Depression, President Franklin Delano Roosevelt switched Lincoln's chosen date of the last Thursday of November to the second-to-last Thursday of November. Why? Purely in order to extend the post-Thanksgiving, pre-Christmas shopping season! The move was met with confusion and criticism – so in 1942, Congress signed a law making Thanksgiving the fourth Thursday of November, a law which is still in effect today.
No matter how you celebrate the Thanksgiving holiday, remember the words of John F. Kennedy: “As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” May this holiday season be the most wonderful time of year for you and your family, friends, and colleagues!
Economic Calendar for the Week of November 29 - December 03
Last Week in Review: Recent economic events are giving a strong indication of where rates are headed. Read on to find out where and why.
Forecast for the Week: Here’s a quick rundown of reports we need to watch this week... and there are some big ones on the docket!
View: Read below to find out how decluttering your home can help you financially!
"INFLATION IS WHEN YOU PAY $15 FOR THE $10 HAIRCUT YOU USED TO GET FOR $5 WHEN YOU HAD HAIR." - Sam Ewing. And regardless of how much hair you have these days... one thing we can watch to help a get sense of where rates are going is inflation.
Right now, the headline numbers in the US show little inflation overall... but we are already seeing significant inflation in particular items like commodities, food, and oil - which are being driven by a weak US Dollar, and increasing demand from emerging countries like China and India. In addition, the global market reacted late last week to higher-than-expected inflation in China. This is important to us because Bonds and home loan rates hate inflation, no matter where the whiff of it comes from.
Here’s why. Think of inflation as a hot air balloon and rates as the basket under that balloon. As the balloon (or inflation) rises, the basket (or rates) must rise as well.
So, if inflation moves higher in China, their government has to raise rates to fight inflation. And if rates move higher in China, global investors seeking the highest yield will move away from the relatively meager returns seen in US Bonds - and move their Bond buying money into juicier yields found abroad.
There are so many opinions by so many smart people on both sides of the inflation argument, but right now it is all about what the Bond market thinks. And the recent market action shows just how quickly sentiment in the market can change. Remember, it was just a few weeks ago that fears and whispers of deflation helped the Bond market - and home loan rates - improve.
But now with the Fed intent on avoiding deflation and in fact creating inflation through another round of Quantitative Easing (or QE2), the entire Bond market - including Mortgage Bonds - have began to react negatively. Remember, Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds, in a bid to stimulate the economy by:
While those goals may be good for the overall economy, we need to remember that all three are very unfriendly to Mortgage Bonds and home loan rates.
The good news is, despite ending the week worse than where they started, home loan rates are still near historic lows for the time being. If you or someone you know is looking to take advantage of low rates, now is the time. Please call or email me today to get started.
After a relatively slow schedule of economic reports last week, we’ll see some big reports over the next few days with the potential to really move the markets.
We’ll start off right away Monday morning with the Retail Sales report for October as well as a dose of manufacturing news in the Empire State Index, which looks at New York State’s manufacturing sector, and is a good gauge of manufacturing overall. On Thursday, we’ll also see the Philadelphia Fed Index, which is another important manufacturing report. Those two indices have the potential to impact the market, since they indicate the health of the manufacturing sector in the US.
Even more big news is headed our way on Tuesday with the Producer Price Index (PPI), which measures inflation at the wholesale level. Then, the very next day on Wednesday morning, we’ll see the Consumer Price Index (CPI) with a look at inflation at the consumer level. In light of last week’s news and the information described above, it will be important to see what these reports reveal - since inflation is the archenemy of Bonds and home loan rates.
Wednesday will also bring more housing industry news with reports on the number of Housing Starts andBuilding Permits in October.
The week of reports caps off on Thursday with the Initial Jobless Claims report. Last week’s report indicated that Initial Jobless Claims fell in the latest week to the lowest reading since July. Continuing Jobless Claims also moved lower. While those numbers showed modest improvements and are steps in the right direction, there is still a lot of wood to chop where jobs are concerned.
Some of the charts that monitor Bond activity can look complex - but they tell quite a story! In the chart below, pay attention to the downward trend for Bond prices (which means an upward trend for home loan rates) since November 3rd, which was when the Fed announced their QE2 plans. This chart shows us that Mortgage Bonds have traded sharply lower since the Fed Meeting and official QE2 announcement. Again, home loan rates are still at historically low levels for the time being, which means there’s still time to purchase or refinance a home and take advantage of the great rates. And it only takes a few minutes to get the process started – please feel free to get in touch with me, and pass on this newsletter to friends, family members, neighbors or coworkers that might benefit as well!
Chart: Fannie Mae 3.5% Mortgage Bond (Friday, November 12, 2010)
Financial Benefits of Decluttering
It pays off to unload items you no longer need (or never really needed at all)
By Cameron Huddleston, Kiplinger.com
I have been in a decluttering mode lately. It was sparked by moving my mom from her three-bedroom home to a one-bedroom apartment in my house -- and having to pare down her belongings. Spending weeks going through all her stuff to figure out what she did and didn't need (then selling and donating the unnecessary items) made me want to remove all the clutter from my life, too. A few articles I recently read fueled this desire even more.
My husband and I usually go through our closet once a year to clear out clothes we no longer wear. But an article in the New York Times about people who decided to wear only six items for a month made me aware that there still is a lot in my closet that I don't need.
We occasionally go through other closets, cabinets and drawers to rid them of items that don't get used and just take up space. After reading G.E. Miller's 3 Guerilla Tactics to Get Rid of Clutter on 20somethingfinance, I realized my haphazard keep-or-toss tactics weren't cutting it.
What resonated with me most, though, was a reader comment on the Opinionator blog post How to Lose a Legacy. The reader wrote about cleaning out his (or her) parents' home after his mother died and father moved out: "I wonder why we (me) hang on to stuff that really just takes up physical and emotional "room" in our lives; I s'pose it's because the "stuff" (as George Carlin so aptly and comically put it) signifies a longing to hang on to, or dare I say, cling, to memories using physical things... even if we actually wish we could just throw a lot of it in the trash."
It feels good to get rid of the clutter. This is a personal finance column, so I won't advocate just throwing your stuff in the trash because you'd miss out on the financial benefits of decluttering. Here's what getting rid of things you don't need can do for your finances.
1. Lower your tax bill. If you itemize on your tax return, take all that stuff to Goodwill or any other charitable organization and claim a deduction for your contribution. Goodwill has a list of price ranges for items sold in its stores that can help you figure out the market value of items you donate. If your noncash contributions total more than $500, you must complete Form 8283 and attach it to your tax return. Single items valued at $5,000 or more, regardless of condition, require a written appraisal.
2. Put money in your pocket. You've heard it before: One man's trash is another man's treasure. Have a yard sale (see these tips) or sell your wares on eBay, Craigslist and other sites (watch this video).
3. Eliminate financial mess. While you're decluttering, take the time to get rid of documents you no longer need and go digital with the rest. See Paper Records: What to Toss, What to Keep and Create a Digital Archive of Tax Records for help. This exercise can help you get your remaining documents organized, save you time as you prepare your next tax return and perhaps prompt you to find ways to streamline more of your financial responsibilities (by setting up automatic bill pay, for example, and eliminating all those monthly paper bills).
Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
Economic Calendar for the Week of November 15-19, 2010
Economic Calendar for the Week of November 15 - November 19
Last Week in Review: The highly anticipated Jobs Report for September is in. What was the news... and what does it mean for home loan rates?
Forecast for the Week: With the Meeting Minutes from the Fed’s last get together coming - as well as Retail Sales numbers, two inflation reports, and more Third Quarter earnings season ahead, a busy news week is in store!
View: Texting while driving has become a hot issue... but it doesn’t have to worry you anymore. Find out why below.
"EVERYBODY’S WORKING FOR THE WEEKEND...." (Loverboy, 1981) Or... are they? Unfortunately, many folks out there these days sure wish they were working at all... and the Labor Department reported last Friday that the US lost 95,000 jobs in September. What else did the Jobs Report say and what could the news mean for home loan rates? Read on for details.
A closer look at the Jobs Report for September shows that 159,000 of the jobs lost were government workers, many of which are the unwinding of the temporary census hires. The more important private sector added 64,000 jobs - but still not great, and also below the 74,000 expected. But this number confirms the thought that the economy, or the Job market, is stabilizing and perhaps even improving, albeit it at a very gradual pace. More on why this is so important in a minute.
The Jobs Report also showed that the Unemployment Rate remained at 9.6%, just below the 9.7% anticipated. However, it’s likely the actual rate of unemployment is higher. Why? Because if an unemployed individual does not seek employment for four weeks, they are removed from the count of the "officially unemployed." And with unemployment benefits available for about 2 years, it increases an unemployed individual's chances of becoming less motivated to look for a job, until the benefits are close to running out.
This can skew the headline Unemployment Rate, and is evidenced by the sharp rise in the overall unemployment rate or "U6" measurement of unemployment, which stands at 17.1%. The U6 rate accounts for these discouraged workers who have not sought employment for the past four weeks, as well as those who have accepted part-time employment but would prefer to be working full-time.
Now, back to the question of why signs of good - or bad - economic news are particularly important of late. The Fed will be watching the various economic reports very closely over the next few weeks in advance of their next regularly scheduled meeting on November 2-3, as they are considering a second round of Quantitative Easing (QE2) to ensure that our slowing economy does not slow even further. If the economic reports that are ahead are more negative than positive, this will increase the likelihood of more QE... but it’s not a foregone conclusion at this point in the least.
So what does all this have to do with home loan rates? If the economic news continues to be soft and the Fed does go through with another round of QE, Bond prices and home loan rates may initially improve for two reasons. First, if the economic data is weak leading up to an announcement - that soft economic news tends to be bad for Stocks, but good for Bonds and therefore home loan rates. Additionally, Bonds would improve simply because the announcement of QE would include large Bond purchases. But keep in mind that the key word is "initially." Even though Bonds and home loan rates could initially improve, the eventual softening of the Dollar, rising commodity prices, and rise in Stock prices would become a drag on Bonds, which would negatively impact home loan rates.
We’ll see what happens in the coming weeks leading up to the Fed’s next meeting on November 2-3. But last week, meanwhile, the news had a positive impact on Bonds and home loan rates, as they ended the week about .125 to .25 percent better than where they began.
If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don’t hesitate to call or email me as soon as possible. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge.
FINDING IT HARD NOT TO TEXT AND DRIVE? YOU CAN DO IT SAFELY…THANKS TO THIS GREAT NEW APP. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR DETAILS.
It may be a short week in the Bond Market, with the market closed Monday for the Columbus Day holiday (the Stock Market will be opened), but there will still be plenty of news to work through. On Tuesday, we’ll get a look at the Minutes from the Fed’s September 21st Meeting, and these may give us even more information about which way the Fed is leaning in the QE department.
A double dose of inflation news ends the week, with the Producer Price Index on Thursday (which measures inflation at the wholesale level) and the Consumer Price Index on Friday. Remember, inflation is the archenemy of Bonds and home loan rates, so any hint that inflation is increasing could cause home loan rates to worsen.
Two other reports to note include Thursday’s Initial and Continuing Jobless Claims (last week’s report, while not great, was slightly better than expected) and Friday’s Retail Sales Report. In addition, third quarter earnings season kicks into full gear this week. Some reports to look for include JP Morgan Chase and General Electric, reporting respectively Wednesday and Friday before the markets open.
As you can see in the chart below, Bonds and home loan rates hit record levels as the talk of QE2 continued. I’ll be listening closely for the latest developments on that front this week.
Chart: Fannie Mae 3.5% Mortgage Bond (Friday, October 8, 2010)
Safer Driving... There’s an App for That!
A recent study by the National Highway Traffic Safety Administration found that distracted driving was the leading cause in 448,000 accidents and 5,474 highway deaths in 2009. That represents a 16% increase from 2008.
That increase is one reason why U.S. Transportation Secretary Ray Lahood has proposed mandatory warnings in automobiles about distracted driving. Lahood, like many parents today, is concerned about the growing increase of technology use in automobiles - including distractions that are being added to new cars that allow "drivers to update Facebook, surf the Web or do any number of other things instead of driving safely," Lahood said.
Here’s how it works... You download an application to your phone. Then, when you get in your car to drive, you simply turn the application on. When you receive a text message, the application actually reads it to you... automatically... and out loud. So there’s no need to take your eyes off the road.
Better still... the application automatically sends a reply message stating that you are driving and will respond as soon as you reach a destination that allows you to safely reply.
The application can be used on a variety of phones and there are even different plans - including a free version of DriveSafe.ly as well as family and business plans.
If you receive a lot of text messages while driving or if you have a teenager of driving age, this could be one of the most important safety steps you do this year. Take a few minutes to check it out.
After all, this simple application could save your life or the life of someone you know.
Economic Calendar for the Week of October 11-15, 2010
Economic Calendar for the Week of October 11 - October 15
If you can't see the newsletter, or would like to view it online, use this link
If you have received this newsletter indirectly and would like to be added to our distribution list, use this link
Provided to you Exclusively by Andi Bytyqi
Andi BytyqiPresidentMetro Point Lending LLCOffice: 405.513.8610Mobile: 405.205.7585Fax: 877.203.0303Email: Andi@MetroPointLending.comWebsite: www.MetroPointLending.com
For the Month of March 2009 --- Vol. 4, Issue 3
IN THIS ISSUE...
New Stimulus and Stability Plans Equal Opportunities!
Over the past few weeks, we've seen the birth of unprecedented stimulus plans and legislation that impact the housing and home loan industries. The provisions of these plans could have huge implications for those who are considering purchasing or refinancing a home. The articles below provide an overview of some benefits of the Economic Stimulus Plan and the Homeowner Affordability and Stability Plan that may impact you.
For example, the first article offers an easy-to-understand overview of two new initiatives introduced by the Obama Administration to help struggling homeowners. In addition, the $8,000 tax incentive article explains what the new tax incentive entails, as well as who qualifies for this benefit. Finally, the third article explains how you can take advantage of the higher loan limits that have now been extended!
These plans may be helpful to many of your friends, family members and coworkers. So please forward this newsletter on to them or let me know if they'd like to enjoy their own free subscription. And if you need any personal assistance at this time, simply call or email.
HOMEOWNER AFFORDABILITY AND STABILITY PLAN
President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is an incentive for homeowners who have less than 20% equity in their homes, or who owe more than their home is worth. The second part attempts to lower monthly payments for homeowners at risk of losing their home. Here is a brief overview of both initiatives.
Less than 20% equity in your home? Under current rules, those families who own less than 20% equity in their homes have a difficult time taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans that are guaranteed by Fannie Mae and Freddie Mac. The plan would enable them to move to a new loan for up to 105% of their homes value.
According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The new loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost option may help reduce their monthly payments by up to thousands of dollars per year. As with the rest of the plan, details about this initiative will be released at a future date-including what, if any, credit score requirements will be included.
On the verge of default? This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their monthly payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." Homeowners who are current on their loans but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.
These plans-combined with today's historically low interest rates-have created an unprecedented opportunity for homebuyers. If you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.
$8,000 TAX CREDIT FOR HOMEBUYERS
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
It's important to remember that the $8,000 tax credit is just that... a tax credit. It's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the incentive is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax incentive... and still receive a check for the remaining $4,000!
Who Qualifies?
The $8,000 incentive starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000 and is phased out completely at incomes of $170,000 for couples and $95,000 for single filers. To break down what this phase-out means, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out threshold is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer incentive to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible to reduce the tax liability by $2,800.
Remember, these are general examples. Borrows should consult a tax advisor to provide guidance relevant to their specific circumstances.
What Type of Home Qualifies?
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
HIGHER, NON-JUMBO LOAN AMOUNTS EXTENDED
For those who are considering taking advantage of the $8,000 tax incentive for first-time homebuyers, there is some more good news that could make doing so easier and more accessible.
An extension is now officially in place on the higher loan limits for mortgages in the tier that lies just below what is considered a "jumbo" loan. First established last year, and now extended through the end of 2009, limits on this additional tier provide opportunities for many who are looking to either refi or, better yet, take the plunge into first time home ownership and grab a piece of the highly publicized $8,000 tax incentive.
Here are some key points about this higher loan limit extension, announced by the Fair Housing Finance Agency:
For more information about qualifying for the opportunities that are provided by the stimulus plan, simply call or email to set up an appointment.
The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today!
In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: Andi@MetroPointLending.com
If you prefer to send your removal request by mail the address is:Andi Bytyqi Metro Point Lending, LLC16307 Sonoma Park Dr.Edmond, OK 73013
Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC does not grant to the recipient or distributor a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content except as otherwise provided in our Terms and Conditions of Membership, for any purpose.
Home | Rate Sheet | About Us | My Blog | Contact | Testimonials | Loan Application | Mortgage Calculators | View Loan Status
Copyright © 2012 Metro Point Lending LLCPortions Copyright © 2012 a la mode, inc.Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site Map
