For more information on this really wonderful incentive for first time homebuyers, or buyers who haven't owned a residence for three years, follow this link:
http://www.federalhousingtaxcredit.com/2009/faq.php
for comprehensive information, then come see us!
Thursday, February 26, 2009
Friday, February 20, 2009
Economic Stimulus Benefits Housing and Mortgage Industries
Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy and helping people acquire, and retain, the homes. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...
________________________________
Tax Credit for Homebuyers
Go to this website for answers to most of your questions about the tax credit:
http://www.federalhousingtaxcredit.com/
________________________________
Homeowner Affordability and Stability Plan
President Obama today unveiled details of a foreclosure prevention plan designed to help 7 to 9 million responsible homeowners afford their mortgage payments. March 4 has been designated as the official roll out date for the program. The plan has three main components:
1. A refinancing program for borrowers who are current on their mortgage payments but who have been unable to refinance because the value of their home has declined.
2. A mortgage modification program for borrowers in default, or at imminent risk of default, that builds on the model established by the FDIC by expanding eligibility and establishing incentives for borrowers, mortgage holders and servicers.
3. Actions to bolster the financial stability and mortgage support capacity of Fannie Mae and Freddie Mac.
Refinancing Program
· Applies to loans owned or guaranteed by Fannie Mae and Freddie Mac.
· Allows borrowers, who because of a decline in their house value, have a mortgage loan-to-value ratio (LTV) of greater than 80 percent, to refinance to a lower interest rate mortgage, even if the new loan would have previously failed to meet Fannie/Freddie requirements.
· Maximum LTV on new mortgage is 105%. Will not help homeowners who are completely underwater on their mortgage (those households will be addressed in the mortgage modification portion of the program).
· Program is expected to create mortgage refinancing opportunities for up to 4-5 million homeowners.
Mortgage Modification Program
· Builds on the loan modification protocol developed by the FDIC, where a loan is modified by reducing the interest rate, increasing the term and/or deferring/reducing principal payments, if such adjustments result in a better net present value for the mortgage investor than disposition through foreclosure.
· Establishes clear and consistent standards and guidelines for identifying borrowers at risk of default and for loan modifications.
· Eligibility is based on high mortgage debt payments compared to income, or borrowers that are underwater. Delinquency is not a requirement for eligibility. Will also serve homeowners who have not missed payments, but who are in danger of doing so. Requires HUD-approved counseling for families with high (55 percent) total debt-to-income ratios.
· Keeps modified payments in place for at least 5 years, after which payments may be gradually increased to the conforming loan rate at time of modification.
· Servicers receive FSP/TARP funds for undertaking modifications, for subsequent modification successes, and are offered, along with mortgage holders, additional financial incentives to modify loans prior to default.
· Provides financial incentives to borrowers who remain current on mortgage payments following loan modification.
· Provides a partial guarantee to mortgage holders (through a $10 billion insurance fund established by Treasury and FDIC) to offset future declines in the value of the home collateral.
· Program is expected to reach up to 3-4 million at-risk homeowners.
· To establish additional motivation for loan modifications, seeks legislation to make changes in personal bankruptcy statue that will allow judges to modify mortgage terms, including reductions (cramdowns) of principal obligations.
Initiatives to Bolster Fannie Mae and Freddie Mac
· Increases Treasury’s Preferred Stock Purchase Agreements to $200 billion for each company, up from the current $100 billion commitment.
· Continued Treasury purchases of Fannie and Freddie MBS and debt.
· Increases Fannie’s and Freddie’s portfolio limits by $50 billion to $900 billion for each company.
· Commits Fannie and Freddie to providing support to state housing finance agencies.
________________________________
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing — This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.
Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance — This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
This information was provided by Hillary Singer of Excellence Mortgage in San Antonio, 210-930-5714.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...
________________________________
Tax Credit for Homebuyers
Go to this website for answers to most of your questions about the tax credit:
http://www.federalhousingtaxcredit.com/
________________________________
Homeowner Affordability and Stability Plan
President Obama today unveiled details of a foreclosure prevention plan designed to help 7 to 9 million responsible homeowners afford their mortgage payments. March 4 has been designated as the official roll out date for the program. The plan has three main components:
1. A refinancing program for borrowers who are current on their mortgage payments but who have been unable to refinance because the value of their home has declined.
2. A mortgage modification program for borrowers in default, or at imminent risk of default, that builds on the model established by the FDIC by expanding eligibility and establishing incentives for borrowers, mortgage holders and servicers.
3. Actions to bolster the financial stability and mortgage support capacity of Fannie Mae and Freddie Mac.
Refinancing Program
· Applies to loans owned or guaranteed by Fannie Mae and Freddie Mac.
· Allows borrowers, who because of a decline in their house value, have a mortgage loan-to-value ratio (LTV) of greater than 80 percent, to refinance to a lower interest rate mortgage, even if the new loan would have previously failed to meet Fannie/Freddie requirements.
· Maximum LTV on new mortgage is 105%. Will not help homeowners who are completely underwater on their mortgage (those households will be addressed in the mortgage modification portion of the program).
· Program is expected to create mortgage refinancing opportunities for up to 4-5 million homeowners.
Mortgage Modification Program
· Builds on the loan modification protocol developed by the FDIC, where a loan is modified by reducing the interest rate, increasing the term and/or deferring/reducing principal payments, if such adjustments result in a better net present value for the mortgage investor than disposition through foreclosure.
· Establishes clear and consistent standards and guidelines for identifying borrowers at risk of default and for loan modifications.
· Eligibility is based on high mortgage debt payments compared to income, or borrowers that are underwater. Delinquency is not a requirement for eligibility. Will also serve homeowners who have not missed payments, but who are in danger of doing so. Requires HUD-approved counseling for families with high (55 percent) total debt-to-income ratios.
· Keeps modified payments in place for at least 5 years, after which payments may be gradually increased to the conforming loan rate at time of modification.
· Servicers receive FSP/TARP funds for undertaking modifications, for subsequent modification successes, and are offered, along with mortgage holders, additional financial incentives to modify loans prior to default.
· Provides financial incentives to borrowers who remain current on mortgage payments following loan modification.
· Provides a partial guarantee to mortgage holders (through a $10 billion insurance fund established by Treasury and FDIC) to offset future declines in the value of the home collateral.
· Program is expected to reach up to 3-4 million at-risk homeowners.
· To establish additional motivation for loan modifications, seeks legislation to make changes in personal bankruptcy statue that will allow judges to modify mortgage terms, including reductions (cramdowns) of principal obligations.
Initiatives to Bolster Fannie Mae and Freddie Mac
· Increases Treasury’s Preferred Stock Purchase Agreements to $200 billion for each company, up from the current $100 billion commitment.
· Continued Treasury purchases of Fannie and Freddie MBS and debt.
· Increases Fannie’s and Freddie’s portfolio limits by $50 billion to $900 billion for each company.
· Commits Fannie and Freddie to providing support to state housing finance agencies.
________________________________
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing — This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.
Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance — This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
This information was provided by Hillary Singer of Excellence Mortgage in San Antonio, 210-930-5714.
Friday, February 6, 2009
Tax Advantages of Home Ownership
Owning your own home can be a very rewarding experience -- especially when tax time rolls around. Three tax items in particular -- the mortgage interest deduction, the property tax deduction and the capital gains exclusion -- can provide significant financial benefits to home owners. And, in 2009, first-time home buyers may receive the benefit of a $15,000 tax credit. Talk with your lender about this exceptional tax incentive.
Mortgage Interest Deduction
The interest you pay as part of your mortgage payment is deductible on your federal tax return.
This deduction applies to first and second mortgages, up to $1 million of mortgage debt. Your lender should provide you with one or more IRS Form 1098s, which tell you the amount you may claim on your tax return. To benefit from this deduction you must itemize your deductions using a Schedule A form.
You may also deduct the interest on money you borrow against your home to finance housing or non housing-related expenses. An example is a home equity loan, which many home owners use to remodel their home, pay off credit card bills, buy a car, finance a vacation or pay for education expenses.
Property Tax Deduction
State and local taxes paid on the assessed value of the home are also deductible on your federal return. Like the mortgage interest deduction, itemizing is necessary if you wish to deduct property tax payments.
Notably, for many home owners the combined deductions for mortgage interest and property taxes exceed the standard deduction -- currently between $5,450 and $10,900, depending on filing status. When this is the case, home owners are able to deduct or "write-off" many other items including charitable contributions, state income or sales taxes, medical and dental expenses tax preparation fees and other miscellaneous allowable deductions, which collectively can reduce your federal and state income tax liabilities dramatically. Research by economists at the National Association of Home Builders (www.nahb.org) indicates that for the typical home owner, these savings can exceed $8,000 in the first year of home ownership.
Capital Gains Exclusion
Perhaps the biggest advantage to owning a home is the ability to avoid paying capital gains when it is sold. Under current law, married home owners filing jointly may exclude up to $500,000 of capital gains and single tax filers may exclude $250,000 from taxation. This exclusion applies only if you have lived in your primary residence for two years or more. But the exemption may be used repeatedly as long as the residence rules are met.
The tax benefits conferred on home owners by the federal government are substantial. Annual benefits, such as the mortgage interest deduction and the property tax deduction, along with the less frequently used benefit of capital gains exclusion, make home ownership more tax advantageous than almost any other investment. Take advantage of it!
Mortgage Interest Deduction
The interest you pay as part of your mortgage payment is deductible on your federal tax return.
This deduction applies to first and second mortgages, up to $1 million of mortgage debt. Your lender should provide you with one or more IRS Form 1098s, which tell you the amount you may claim on your tax return. To benefit from this deduction you must itemize your deductions using a Schedule A form.
You may also deduct the interest on money you borrow against your home to finance housing or non housing-related expenses. An example is a home equity loan, which many home owners use to remodel their home, pay off credit card bills, buy a car, finance a vacation or pay for education expenses.
Property Tax Deduction
State and local taxes paid on the assessed value of the home are also deductible on your federal return. Like the mortgage interest deduction, itemizing is necessary if you wish to deduct property tax payments.
Notably, for many home owners the combined deductions for mortgage interest and property taxes exceed the standard deduction -- currently between $5,450 and $10,900, depending on filing status. When this is the case, home owners are able to deduct or "write-off" many other items including charitable contributions, state income or sales taxes, medical and dental expenses tax preparation fees and other miscellaneous allowable deductions, which collectively can reduce your federal and state income tax liabilities dramatically. Research by economists at the National Association of Home Builders (www.nahb.org) indicates that for the typical home owner, these savings can exceed $8,000 in the first year of home ownership.
Capital Gains Exclusion
Perhaps the biggest advantage to owning a home is the ability to avoid paying capital gains when it is sold. Under current law, married home owners filing jointly may exclude up to $500,000 of capital gains and single tax filers may exclude $250,000 from taxation. This exclusion applies only if you have lived in your primary residence for two years or more. But the exemption may be used repeatedly as long as the residence rules are met.
The tax benefits conferred on home owners by the federal government are substantial. Annual benefits, such as the mortgage interest deduction and the property tax deduction, along with the less frequently used benefit of capital gains exclusion, make home ownership more tax advantageous than almost any other investment. Take advantage of it!
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