Posted by Chris Richter in Homebuyer Tax Credit Tuesday, 9 March 2010 07:47 No Comments
In November, Congress extended and expanded the First-Time Home Buyer Tax Credit program to include a subset of “move-up” buyers — homeowners that have owned and lived in their home for 5 of the last 8 years.
The credit ranges up to $8,000 per buyer. There’s now just 7 weeks left to take advantage.
To be eligible, home buyers must be under contract for a new home no later than April 30, 2010, and must be closed no later than June 30, 2010.
In addition to meeting the deadline dates, there’s a basic set of requirements to be tax credit-eligible:
- You can’t purchase the home from a parent, spouse, or child
- You can’t purchase the home from an entity in which the seller is a majority owner
- You can’t acquire the home by gift or inheritance
- Each buyer in the purchase must meet eligibility requirements
There’s other criteria, too.
For one, the sales price on the subject property cannot exceed $800,000. Homes sold for more than $800,000 are ineligible for the tax credit. Furthermore, households earning more than $125,000 as single-filers, or $225,500 for joint-filers, are ineligible.
You can read the complete eligibility requirements at the IRS website, or, you may just find it simpler to speak with your accountant about it. There are some nuances in qualifying for and claiming the tax credit on your returns and getting a professional’s opinion is always wise.
And lastly, don’t forget that government’s tax credit program is a true tax credit. It’s not a tax deduction. This means that a tax filer whose “normal” tax liability is $3,500 and who is eligible for $8,000 in credit will receive a $4,500 refund from the U.S. Treasury.
Mark your calendar for April 30, 2010. It’s 7 weeks away and you can be sure that as the date gets closer, buyer traffic is going to increase. You may find sellers more willing to negotiate today than several weeks from now.
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Posted by Chris Richter in Weekly Review Monday, 8 March 2010 07:46 No Comments
The FHA interest rate improved again last week.
Light volume and steady gains all week. Then the better-than-expected jobs report on Friday took back much of the week’s gains.
Rates were best Thursday afternoon, but it was still the second consecutive week in which the FHA interest rate fell.
FHA Loan Rate Predictions For This Week
More volatility.
There are not many economic reports with just Consumer Confidence and Retail Sales due out. A status quo for rates would be great. Any change is significantly more likely to drive rates up than push them down.
The ticking clocks for this week are two-fold and completely outside of normal mortgage rate factors:
- The end of the Fed’s support of the mortgage bond market
- Potential resolution on the EU / Greece bailout discussions
We’ve had almost all of $1.25T supporting mortgage rates for the past year. That’s ending. The Fed has been a buyer of epic proportion. Rates will go up if no one else has an appetite for that many mortgage bond investments.
We’ve had a huge influx of foreign money in the past few weeks. It’s helped push the FHA mortgage rate lower and stocks higher in the same week. That’s not normal. That’s because foreign investors felt the US was safer than anywhere else. If the Greece issue finds resolution, expect rates to jump.
