Good News
There is almost always some good news around somewhere. But sometimes you have to look a little
harder for it. Here are two recent
pieces of good news.
First is a short summary of the new federal Loan Modification
Program and a helpful link to get more information.
Loan Modification – On March 4, 2009, the federal government announced the
details of the federally supported home mortgage modification and refinancing
program. For homeowners in financial
hardship situations, one part of the program will try to reduce the interest
rate on the existing mortgage down to a level which is affordable to the
homeowner, and keep the rate at that level for five years. The second part is an option of the program
for refinancing homeowners into a lower cost fixed-rate mortgage, even up to
105% loan-to-value ratio if needed to make it work. Other potential actions include may include
partial principal forgiveness or principal payment deferral. A good place to start investigating these new
programs is the federal site: http://www.makinghomeaffordable.gov/
Second is a summary of some key points in the 2009 Economic Stimulus
Plan could be good news for quite a few people.
This summary is provided by our friend Rick Robertson at Choice Lending
in
|
|
|
There are four primary sections of the 2009 economic
stimulus plan that could be very beneficial if you own or are buying a home. Benefit #1 — Expansion of Home Improvement Tax Credit The tax credit for making energy efficient home
improvements is now 30% of the cost of the improvements up to a maximum of
$1,500. This means that if the improvements cost you $4,500, you would
receive a tax refund of $1,500 when you file your tax returns. Eligible
improvements include energy efficient exterior doors and windows, insulation,
heat pumps, furnaces, central air conditioners and water heaters. Generally,
your home improvement contractor and/or the manufacturer selling the
improvements issues a certification that clarifies whether the improvements
meet the necessary standards for energy efficiency. Most modern windows,
furnaces, and air conditioners meet these requirements. If you've been
holding off on making some of these improvements, now is a great time to get
a move on it - especially with all the great deals that are being offered! Benefit #2 — Expansion of First-time Home Buyer Tax Credit The tax credit available to first time home buyers was
increased from $7,500 to $8,000 for homes purchased between January 1, 2009,
and December 1, 2009. Also, the credit no longer needs to be paid back as
long as you live in the home without selling it for at least 3 years. The
previous version of the credit expired on July 1, 2009, and required home
buyers to pay the funds back over a 15 year time frame. The income limitations remain the same ($75,000 for single
tax payers claiming the full credit and $150,000 for married tax payers), as
do most other qualification requirements. Also, the credit remains
refundable. This means that first-time home buyers who owe less than $8,000
in taxes for the year are still eligible for the full $8,000 credit when they
file their tax returns. In that case, the IRS will write you a check for the
difference between $8,000 and your actual tax bill. In fact, the credit can
be claimed on your 2008 tax returns that you file by April 15, 2009, even if
you buy the home in 2009. There is one catch, however: if you bought the home in
2008, the credit remains $7,500, and it still needs to be paid back over a 15
year timeframe beginning in 2011 when you file your 2010 returns. Benefit #3 — Higher Reverse Mortgage Loan Limits The loan limits for FHA-insured reverse mortgages have been
increased to $625,500 across the entire country - not just the higher cost
areas. The previous limit was $417,000 across the country. This is especially
important because the FHA program is virtually the only game in town as
private and jumbo reverse mortgage programs have nearly all evaporated. This coincides with another little-known
change in the reverse mortgage arena: the availability of reverse mortgages
on home purchase transactions. This is a fantastic opportunity for senior
citizens to buy a new home and live mortgage payment-free without having to
wait for their old home to sell. Seniors could also use this strategy to buy
a new home and turn the old home into a rental or otherwise wait for market
conditions to improve before trying to sell the old home. |
|
|
|
Benefit #4 — $729,750 FHA and Maximum Conforming Loan
Limits Restored in High Cost Areas The $729,750 maximum loan limit had been in force
throughout 2008, but was reduced to $625,500 in 2009. The economic stimulus
plan restores the $729,750 maximum in ‘high cost’ areas. This makes higher
cost homes more affordable — especially in the coastal housing markets that
tend to have higher than average home values.
(Note by CHR - In the Seattle region, that maximum conforming loan
limit has now been set at $567,500 – equivalent to a $709,375 home purchase
with 20% down) It is always advisable to consult with a Certified Mortgage
Planning SpecialistTM
(CMPS®) when navigating today's turbulent mortgage and real estate
marketplace. As a CMPS® professional, I am committed, qualified and equipped
to help you evaluate your mortgage options! To ensure compliance with requirements imposed by the
Internal Revenue Service, we inform you that any U.S. federal tax advice
contained in this communication (including any attachments) was not intended
or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties or (ii) promoting,
marketing or recommending to another person any transaction or matter
addressed in this communication. Also, it is important to note that I am
providing this information to you as your mortgage planner, in order to make
you aware of some of interesting ideas that may benefit you. I am not an
investment, tax, or legal advisor, and this information does not constitute
legal, tax or investment advice. I definitely recommend that you consult with
properly licensed legal, tax and investment advisors for specific advice
pertaining to your individual situation. |
|
|
Rick
Robertson, CMPS®
Choice Lending, Inc
Suite A306
206-383-3360
direct
425-649-9100 alternate
425-641-5817 fax
[email protected]
http://www.choicelendinginc.com