Home Buyer Tax Credit
Boosts Home Sales
According to the National
Association of Realtors:
Consumers cashed in on the Home Buyer
Tax Credit in November.
- Existing home sales rose by
7.4%, compared to sales in
October
. Consumers
rushed to take advantage of the home buyer tax credit
before
the November 30th deadline. (At the time, it was not
clear that Congress
would extend the program which they have until May 30th,
2010.)
. Home
sales in November reached the highest level since
February 2007.
- Regionally, existing-home
sales rose in all four regions of the country in
November.
.
Northeast
Sales
rose by 6.6%
52.7%
higher than November 2008
The
median home price was at $223,000 which is
13.1% down from November
2008
. Midwest
Sales
rose by 8.4%
53.6%
higher than November 2008
The
median home price was at $140,800 which is 0.4% down
from
November
2008
. South
Sales rose by 4.8%
44.8%
higher than November 2008
The median home price was at $151,400 which is 1.4% down
from
November 2008
. West
Sales rose 10.6%
28.1% higher than November 2008
The median home price was at $231,100 which is 4.1% down
from
November 2008
The above are national figures.
Looking at the market closer to home, in November
2009 the median home price in Santa Fe County was
$258,125 down from $309,500 in November
2008.
Tax Credit Deadline:
What You Need to Know
As part of its plan to stimulate
the U.S. housing market, Congress last fall approved the
Extended Home Buyer Tax Credit. This extended the
deadline for the First-Time Home Buyer Tax Credit from
Nov. 30, 2009, to April 30, 2010, and expanded it to
include repeat buyers.
What’s the
deadline?
To qualify, first-time and
repeat buyers must have a binding written contract by
April 30 and close by July 1.
How much money is
available?
The maximum allowable credit for
first-time home buyers is $8,000. The maximum for repeat
buyers, also referred to in the legislation as
"long-time residents," is $6,500.
What properties are
eligible?
The Extended Home Buyer Tax
Credit may be applied to primary residences, including
single-family homes, condos, townhomes, and
co-ops.
How do buyers get the
benefit?
Buyers can apply the credit to
their 2009 tax return, filed on or before April 15,
2010; file an amended 2009 return; or apply the credit
on their 2010 return, filed on or before April 15,
2011.
Who
qualifies?
To qualify as a first-time home
buyer, the purchaser or his or her spouse may not have
owned a residence during the three years prior to the
purchase. To qualify as a repeat buyer, current home
owners must have used the home being sold or vacated as
a principal residence for five consecutive years within
the last eight.
Are there income
limits?
The new law raises the income
limits for people who purchase homes after Nov. 6, 2009.
The full credit will be available to taxpayers with
modified adjusted gross incomes up to $125,000, or
$225,000 for joint filers. Those with MAGI between
$125,000 and $145,000—or $225,000 and $245,000 for joint
filers—are eligible for a reduced credit. Those with
higher incomes do not qualify.
From REALTOR Magazine March
2010
Those Who Wait Will Pay
Thousands More This Spring
Waiting a few extra days or
weeks to purchase a home this spring could cost buyers
thousands of extra dollars as the office of Housing and
Urban Development (HUD) implements 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 artificially 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 – submit all FHA mortgage applications by the last
week of March.
Thanks to
Frank Sena,
Senior Loan Officer, L&G Mortgagebanc for this
article
