How the First Time Homebuyer Tax Credit Works

This article is by Kimbrough Gray. Ki has sold Austin real estate for almost 10 years.

There is a provision in the Housing and Economic Recovery Act of 2008 that allows first time home buyers the ability to receive a credit on their taxes of up to $7,500 for purchasing a home. There is also a provision in the American Recovery and Reinvestment Act of 2009 that expands this tax credit for qualified first time home owners. The provision is called the first-time homebuyer credit.

The 2008 first-time homebuyer credit was created to infuse the slumping housing market, and is treated like an interest-free loan. Qualified participants were required to repay the loan interest-free over a period of 15 years, making 15 equal annual payments. You can find more details about this tax credit on the IRS website.

The provision in the American Recovery and Reinvestment Act of 2009 increased the first-time homebuyer tax credit to $8,000 for purchases made January 1 - November 30, 2009. In contrast to the 2008 tax credit, new home owners do not have to repay the credit as long as they do not sell their home within three years of closing on the home.

You need to be armed with the facts before you go to purchase a home on the assumption that you'll receive the credit. The following FAQs will help you navigate through the quagmire of confusion that has surrounded this tax credit.

* Who is eligible? Taxpayers who have not owned a home within the U.S. three years prior to purchasing a new or resale home in the United States. The closing and transfer of title on the home must be completed between April 9 and December 31, 2008 for the 2008 credit, and between January 1, 2009 and November 30, 2009 for the 2009 credit.

* What is the amount of credit? The credit allows for 10 percent of the purchase price. The maximum credit is $7,500 for 2008 and $8,000 for 2009.

* Are there income limits? Income limits are $75,000 for a single filer and $150,000 for a couple filing jointly. The IRS bases the credit on your modified adjusted gross income (MAGI). Your MAGI equals your adjusted gross income (AGI) plus IRA contribution deductions, foreign housing deductions, student loan deductions, higher education expense deductions and foreign income. Partial credit is available to some with higher MAGI.

* Does my home qualify? The home qualifies if it is the taxpayer's principal residence, is located within the U.S. and purchased between April 9, 2008 through July 1, 2009 for the 2008 tax credit, and January 1, 2008 through November 30, 2009 for the 2009 tax credit. For new construction, the date you actually occupy the residence will be considered the purchase date.

* What if I don't owe taxes or I'm exempt from filing? It doesn't matter. The credit applies to qualified applicants regardless of filing requirements, even to those who do not owe taxes or are exempt from filing. You may file solely to claim the first-time home buyer credit.

* How do I claim the credit? Although you are not required to claim the credit, you may do so by filing a Form 5405. You'll need to file the form with the applicable 2008 or 2009 federal income tax return.

* Does the tax credit act as a tax deduction? No. A tax deduction only diminishes the amount of income taxed. For instance, if the taxpayer's AGI is $40,000, then a deduction would reduce the amount taxed by $8,000, depending on the amount of applicable credit. The taxpayer would be taxed on the remaining amount of $32,000. Instead, the credit is directly deducted from what the taxpayer owes the government. If the taxpayer owes $2,000 to the IRS, then $6,000 would be the amount refunded to the taxpayer. If the taxpayer owes nothing, then the entire $8,000 would be refunded, depending on the applicable credit.

12:39 PM - Sep. 29, 2009 - comments {0} - post comment

Fannie Mae affects corporate relocations

This article is by Peg Guinta, CRP, Projects Director for RISMedia’s RIS Consulting Group.

 

Because of changes announced in June by Fannie Mae (FNMA), the largest mortgage purchaser in the country, transferring families’ purchasing power could be significantly impacted.

FNMA’s June 8th Announcement cites it will now disallow inclusion of secondary wage earner’s projected income in loan qualifying income ratios. Fannie Mae has in the past allowed “trailing secondary wage earner income” when determining housing affordability prior to a spouse or partner securing a position in the new location, but has now eliminated this policy.

Dual income families comprise about 70% of all corporate transfers so FNMA’s policy change may impact affordability for many whether purchasing or selling in corporate neighborhoods. For dual income families who rely on both a primary and secondary income to maintain lifestyle, securing employment at the new location in this economy may prove especially challenging.

Previous to this ruling, real estate agents and corporate administrators alike have seen many effects of this market: declining transfer acceptances, sluggish home sales, tightened mortgage lending and lengthier stays in temporary housing. Fannie Mae’s new policy may only reinforce these scenarios for certain corporate transfer populations.

To maintain mobility goals corporations must align relocation policy support with transferring family needs while keeping company objectives in mind. Employers should reevaluate relocation policy assistance periodically - especially when significant market changes in housing and mortgage markets occur, but not all do.

How can real estate agents support transferees’ buying and selling strategies?

Real estate agents are in an influential position in both the early inbound or outbound relocation phases and can help prepare transferring families for smoother passage ahead.

For corporate buyers, awareness and preparation are key:
• determine if your client is affected by the ruling and create awareness of its potential impact during pre-decision or familiarization trips to the new location
• if not already required by employers, urge mortgage preapproval prior to actual house hunting activities
• if not already provided by employers refer spouses/partners to employment assistance counselors and recruitment offices early in the process.
• research alternate lending sources having the ability to portfolio loans or sell to other investors.

For corporate sellers support may mean enhancements for their dual income buyer prospects. Agents’ price opinions and market reports should indicate if potential prospects are likely to be inbound corporate transfers who could potentially benefit by seller-provided incentives.

Appropriate marketing strategies in support of these buyer profiles could include assistance or incentives such as a:
• temporary mortgage rate buy down
• portion of buyer’s closing costs
• credit for first three mortgage payments.

While these seller-assisted incentives won’t change FNMA guidelines, it may attract buyers’ attention while offering a bridge of support until ‘trailing’ income materializes.

Some corporate employers already provide this type of assistance within home sale assistance policies, but many are not yet tuned into supporting seller-offered financial incentives for home selling transferees. In a market of multi-tiered challenges employers may be more receptive to allowing certain exceptions to support sales opportunities and perhaps also avoid another inventory property.

12:19 PM - Sep. 27, 2009 - comments {0} - post comment

8 tips to improve your computer's performance

1. Purchase a Quality Antivirus Program: When you purchase antivirus software, it is important to make sure that, in addition to virus protection, it also protects against spyware and adware. While viruses have the ability to wipe out a computer, the spyware and adware can slow your machine to a snail's pace and compromise your personal information. Be sure to keep your software current by downloading any updates. Also, remember to renew your subscription every year.

2. Perform Your Windows Updates: Your computer will periodically instruct you that there are available Windows updates. It is important to perform these updates, as many will pertain to both computer security and overall operations. You can also set Windows to automatically update for you.

3. Use Your Windows Firewall: Newer versions of Microsoft Windows (including most versions available in the last 10 years) come equipped with a personal firewall, which can protect your personal network from any outside networks. But it only works if it is turned on. On newer versions of Windows, you can access your firewall settings by clicking the "Start" menu, selecting "Control Panel" and then selecting "Security Center".
   
   For older versions, you can click the "Start" menu. Now click the "Run" button (or type run in the Start Search field). When the run window appears, type firewall.cpl and click "OK." The firewall settings are under the "General" tab.

4. Make Sure You Have Plenty of RAM: Not to be confused with hard drive space, RAM is the memory your computer uses to run programs and data for files you are currently working on. If you run more programs than your computer's RAM can handle at one time, it will run more slowly as the programs compete for RAM. To fix the problem, you don't necessarily need to purchase a whole new computer. Instead, try purchasing more RAM from a local computer store.

5. Uninstall Any Unused Programs: Now that you've learned about the importance of RAM, you can understand why it's crucial to keep only the programs you use. To delete any unused programs, click "Start" and then click on "Control Panel." Find the icon that says "Add or Remove Programs," and click it on. Scroll down to find the appropriate program, and have it removed. Your computer will prompt you with instructions.

6. Perform Regular Housecleaning: Regularly deleting your temporary Internet files, cookies, and Internet history will do wonders for maintaining a quick and clean PC. To do so, click "Tools" on the taskbar of your Internet browser. Scroll down and click on "Internet Options." From there, select what you would like to delete. Another bit of housekeeping you should regularly perform is emptying your trash bin.

7. Defragment (Defrag) Your Hard Drive: Defragmenting your hard drive may be the single best thing you can do to keep your computer running optimally. As you add programs and data to your computer, the information in question takes up blocks of actual physical space on the hard drive. Whenever one of those blocks is deleted, a blank space is created. By defragmenting your computer, you remove the blank spaces and create a more efficient pathway.
   
   In order to perform a "defrag" on your hard drive, start by double-clicking your "My Computer" icon. Next, right-click on the "C-Drive" option. Click "Properties," "Tools," and then "Defragment Now." Depending on how fragmented your computer's hard drive is, some system defrags can take several hours - and during that time, you cannot use your computer.

8. Use an Email Service with a Good Spam Filter: The ability for an email service to effectively filter out insidious spam emails is highly important when it comes to minimizing your risk. In addition to regularly cleaning out your email spam file, you should also never give personal information via an email.

12:16 PM - Sep. 25, 2009 - comments {0} - post comment

Time to get organized

 This article is by Allison Carter who is the Chief Executive Organizer and owner of The Professional Organizer.

It happens to the best of us. We're so busy with our summer events and daily to-do lists that things get a little out of place and out of hand. Before you know it, summer's over–and the unresolved clutter from one season starts spilling over into the next.

Preventing this problem is easier said than done. Being organized takes time and energy. And if you haven't done it in a while, it can leave you wondering where you should start and how to get through it.

That's where the advice from a professional comes in. So to help you tackle even the toughest organizational challenges, we interviewed Allison Carter, Chief Executive Organizer and owner of The Professional Organizer, a company that trains and licenses organizers and is dedicated to helping people get organized.

What Should You Do Right Now–Before Summer Ends?

Allison Carter explained that this time of year is crucial to maintaining an organized, clutter-free home heading into the next season. "Before winter, there are some areas of the home, inside and out, that generally need to be cleaned up and cleaned out," Carter stated.

So before you get overwhelmed with other projects or areas of the house you may have been putting off, start with these 5 simple areas before summer ends:

1. The Garden–Gardening hasn't ended until your beds are cleared out and the bulbs are planted. Once that's done, set aside some time to discard the containers you no longer need. Sweep up. Organize seeds and equipment so you know where everything is next year when the warm weather returns.

2. The Closet–As fall approaches, look through the summer clothes you didn't wear even once this year. This is a good time to purge the unloved clothing and donate to someone who can love it. If you store off-season clothing, you can begin the process by storing the clothes that only get worn in summer such as shorts, bathing suits, beach cover-ups, tank tops, and those white shoes.

3. Pool and Water Toys–Pool related toys and equipment should be dried and put into storage bins for re-use next year. Remember to keep it all together, so it's easy to dig out the next time the thermometer climbs back up.

4. Heating–Now is the best time to check your heating and air system, clean out ducts, and perform any maintenance or repairs that are needed. It's also a good time to change your smoke alarm batteries.

5. The Desk–You know they're coming, so why not get ready for those school papers to flow in. Set up an "in box" for each child's papers to be processed. Set up a "keep" box or file for each child's art or paperwork that you want to hold onto for long-term keepsakes.

Being Prepared Makes the Job Easier

To tackle these projects–and other areas of your house that need organization–Carter recommends you have a kit ready to use.

"Many people have a cleaning bucket or a set of tools for the office, but how many people have a kit for organizing? Not enough," explained Carter.

What should you put in the kit? Here are some things Carter recommends you keep on hand to help with your organizing projects:

• Masking tape
• Sharpie markers
• Post-it notes
• Boxes that can fold flat when not in use
• Scissors
• Label maker, stickers or tape
• Trash bags–use black bags for items that should be thrown away
• Donation bags–to make sure you don't confuse donation items with trash items, use white bags for items that are still usable and should be donated
   

These items will help you quickly work through your projects and finish them off by storing and organizing your items, as well as donating or throwing away any unwanted items.

Plan of Attack – Organize One Step at a Time

Once you have these items together, it's time to prioritize your projects. Although deciding what to do first, second, third and so on can seem overwhelming, Carter has simple advice to help you decide. "Prioritization is based on how important something is to you," explained Carter.

So she recommends you start by asking yourself a few simple questions:

• Why are you doing a project?
• What will the payoff be when you're done? Less stress? Being able to find things quickly and easily? Having a neat, clutter free environment?
• Is the pay-off worth the time? If so, which project has the biggest pay-off?

Then, follow Carter's ABCs of organizing to tackle each project step by step:

A - Assess your situation. What is the problem? What do you need to solve the problem?

B - Bunch things together if they are used together (for example, paints with brushes). Bunch things together that are like items (shirts with shirts). Banish the things that don't belong there at all.

C - Contain what you keep. Find the right bin, basket, or shelf for the items you are keeping.

D - Designate a spot where the items will live in your home.

E – Evaluate. Every day, week, month and year, evaluate your situation and re-organize what has become undone.

Avoid These Common Mistakes
 
When it comes to actually tackling your projects, each one will take a different amount of time. But there can be a fear of over-organizing or continually re-organizing.

To help overcome that problem Carter offered the following tip. "One key to staying organized is to learn when you have reached ‘good enough' and not strive for perfection...because there is never a perfect."

Another common mistake is not using the space well, including room at the top of pantries or closets. "Adding shelves can maximize the space," explained Carter.

Should It Stay or Should It Go?

When organizing a space, there are bound to be a number of items that you just don't know what to do with. How many sheets should you keep in a full closet? What about that gift you received six years ago?

To help you quickly determine what to keep, what to throw out, and what to donate, Carter suggested the following tips:

• Ask yourself questions about how often you use things, how much you enjoy things, and if you really need the items at all.
  
   
• Set maximums by space. For example, designate a space and then only save 3 sets of sheets, 1 box of ornaments, and so on if that's all that will fit in that space.
  
   
• Set maximums by number. For example, keep only 10 scarves, only 40 pair of shoes, only 2 sets of silverware; when you buy a new one, make the tough choice as to which one goes away.
  
   
• Set standards…and stick to them. For example, don't keep anything broken, stained, or redundant. Who really needs 4 can openers? If things are broken and need repair, set a time limit. If you haven't repaired an item in 3 months, then it's probably not that important to you.
  
   
• Don't just pile everything up and toss it. Keep separate piles. If something's still useful, but doesn't meet your criteria to keep it, put it in a pile to donate to a worthy cause.

Finally, remember that it's okay to get rid of things that were once prized possessions.

"Just because you loved something once, doesn't mean you still have to keep it," Carter stated. "Taste changes and it's okay to be done with items you don't love any longer."

Timesaving Tips Straight from the Pro

To help you work quickly and efficiently, Carter offers two important tips:

First, group tasks together so you can get the most done in one location or area. Have all your supplies ready before you start organizing a space. Don't leave the room to put things away. Gather up everything that goes elsewhere and put it away after you finish organizing the space or during a break.

Second, don't confuse grouping tasks with multi-tasking, which can be problematic. According to Carter, you shouldn't multi-task on two projects that both require thinking.

"It takes up more time to switch back and forth from task to task," Carter stated. "If you need to do more than one thing at once, only one project should require thinking. The other should be mindless–like folding laundry while having a conversation."

How to Avoid a Major Re-org Every Year…

Regular maintenance is needed to keep your space organized. This means putting things away after you use them.

"Even if you don't do it right away, you should put items away in a reasonable amount of time," Carter explained. "If you work full time or are busy with kids, you might find that you do a big ‘put away' session on the weekends. And that's okay."

Don't be afraid to re-organize when you see things aren't working. And, every time you bring something new into the house make sure you have a specific place for it. "If it doesn't have a home, it will become clutter," Carter said.

Keep It Real…And Keep Your Sanity

In her final words of wisdom, Carter reiterated that organizing is an ongoing process, not a one-time thing.

"Most people buy more than they actually need–and that's great for capitalism, but bad for clutter," Carter stated. "If your home is full, think twice and three times before making new purchases. And if you do want to buy something, take a minute to toss something out or donate an item."

In addition, to help stay organized, Carter recommends keeping a donation box in a closet and adding to it every time you find things you no longer need. You can also find a nearby donation center or a charity that will pick up items from your home to save time, energy, and your sanity.

8:30 PM - Sep. 23, 2009 - comments {1} - post comment

Paying off debt

The following article is from The Kiplinger Letter.

Should you be putting money in savings or investments at the same time you're paying off a loan?

That's one of the most frequently asked questions we get at Kiplinger, and the answer isn't always obvious. Even if you have run up a balance on a high-rate credit card, you may hear a nagging voice in your head urging you to keep plowing money into savings for retirement, college for the kids or a new home.

The simplistic solution – to invest if you can earn a higher interest rate than you're paying on your loans – can be downright dangerous. That became clear when, in the late '90s, a wave of questionable advice suggested that homeowners actually create more debt to invest in the booming stock market – by pulling out some equity via a cash-out refinancing or home-equity loan. Then came the bear market.

The best answer lies in separating good debt from bad debt. It's almost always a good idea to get rid of credit card and other high-interest loans before you start setting aside cash. However, you probably don't want to accelerate mortgage or student loans at the expense of saving for retirement.

Begin by making a list of all your debt and the interest rates on those debts to prioritize which ones you should pay first, says Deena Katz, president of Coral Gables, Fla., financial planners Evensky, Brown and Katz. Then look at your alternatives for saving and investing and, if necessary, reset your priorities.

Step 1: Pay off the high-interest debt

If you have high-interest credit card debt, tackle that first. It doesn't make sense to start saving or investing until you've paid off this debt. You'd have to make more than 20% after-tax return on stocks, bonds or mutual funds to make them a better investment than paying off a credit card with an interest rate above 15%, says Clark Randall, a financial planner with Lincoln Financial Advisors in Dallas.

There is one exception to that rule of thumb: If your employer offers a 401(k) plan and will match your contributions up to a certain level, fund it up to that level – even if you have credit card debt – because you're getting a 100% return on your investment, says Randall. Contribute more than the match level once you've paid off your consumer debt.

If you're drowning in debt, liquidate assets such as stocks and use your savings – but not a 401(k) or IRA – to pay off your credit cards. If you're in dire straits, you can borrow up to 50% (no more than $50,000) from a 401(k). Although you pay yourself back with interest, you give up tax-free compounding, and you will have to pay back the loan immediately if you leave your employer.

Step 2: Identify the good debt

For the most part, it's usually not a good idea to pay off your home mortgage unless you have a lot of extra cash. After all, Uncle Sam refunds part of your interest payment if you itemize your deductions on your tax return.

Use your money instead to invest in liquid assets. However, Randall recommends paying off your mortgage (and any other debt you might have) by the time you retire so you can get by on less money.

Don't be in a rush to pay off student loans, either. The old rule that allows a tax deduction only for interest paid during the first five years of repayment is ending. Qualifying interest on student loans can be written off no matter how long it takes to pay off your loans.

However, you can ease the burden of repaying your loans. Thanks to recent legislation, you can now shop around for the best terms. For example, lenders may offer a rate reduction if you elect to have your loan payments automatically deducted from your bank account. And some lenders will knock more off your rate after 24 or 36 months of on-time payments. Compare deals at ConsolidationComparison.com.

Step 3: Save and invest

Once you've eliminated high-interest consumer debt, start saving as much as you can. The best place to begin is a 401(k). The next best option is an IRA (see Open Your First IRA).

In addition to putting money into a retirement account, you need cash that's readily available in an emergency so you don't have to rely on credit cards. (If you are paying down your credit card balances and still paying high rates, it is probably better to keep paying off the cards and borrow from them in case of an emergency, says Katz.)

Set aside enough money to tide you over for three months if your paycheck suddenly stopped. If you have less-than-steady income, such as from a commissioned sales position, or a job that has more exposure to economic fluctuations, consider setting aside six months' income. (Use our calculator to see how much you should save.)

Sock it away in a high-yield savings account or money market fund on a monthly basis until you reach your desired amount.

8:25 PM - Sep. 21, 2009 - comments {0} - post comment

Timing is everything

These are new times in the mortgage business. Government involvement comes to those who need it, those who want it, and those who didn't ask for it. Some of the government's actions bring rewards for those who act soon. If you are going to be seeking financing in the next few months, here are some things you need to know.

Show Me Some Money
Part of the Washington Stimulus Package from both last year and this year was the creation of an income tax credit for first-time home buyers. One significant change to the original credit this year was that the amount of the possible credit was increased to $8,000, up from $7,500 and that it does not have to be repaid.

Let's review the last part of this one more time. The tax credit extended does not have to be repaid. This means that if you qualify for an $8,000 credit, it is free money for you to choose what to do with at your discretion. If you have some revolving debt you want to pay off, so be it. Have a car loan less than $8,000, pay it off. Want to start a savings plan with the money because you have all your other ducks in a row? Congratulations, you are on your way!

There are some restrictions including maximum personal or household income and an expiration date of November 30, 2009 but if you qualify, get busy shopping. This is a great benefit we will likely not see again. The National Association of Realtors has reported that if Congress does revisit the tax credit, it will not likely occur before October.

Show Me Some Time
Effective July 30, 2009, legislation will go into effect that will mandate certain "cooling off" periods surrounding home loan applications. Dubbed HERA, or the Housing and Economic Recovery Act of 2008, the law mandates that certain trigger points of the mortgage application offer consumers time to evaluate whether a transaction is best suited for them.

The impact from this legislation is that additional time should be allotted to ensure on-time closings, in some cases as much as 15-30 days to provide ample time to meet all potential delays.

Starting with the initial application, three business days must pass before a lender can accept payment for anything besides a minimal fee for a credit report, which means that a lender cannot accept or collect an appraisal fee in this initial three-day time frame. During this time, the borrower is expected to review the documents to ensure that all fees and the annual percentage rate or A.P.R. are within reason and match what was disclosed upfront.

In addition, if at anytime in the application process a change to the A.P.R. occurs in excess of .125% for a fixed rate or .25% for an adjustable rate mortgage, a new Truth in Lending statement must be delivered to the borrower and three business days must pass before the mortgage can be funded.

Items that can trigger a change in the original A.P.R. can include but are not limited to locking a floating rate at a higher rate than on the original application, a change in the loan program, a change in the originally estimated closing date, and a change in fees or down payment.

Show Me Some Value
A property appraisal can no longer be ordered by anyone directly involved in the origination of a mortgage application where Fannie Mae or Freddie Mac will be the final investor in a mortgage. This is done to ensure that any final value in the appraisal will not be improperly influenced by any parties involved in the origination of the loan.

This is a result of the Home Valuation Code of Conduct (HVCC) that was adopted earlier this year. The impact of HVCC has been felt by consumers both purchasing and refinancing property as many appraisals are being ordered from Appraisal Management Companies, a third party appraisal clearing house, and the appraiser selected may not be directly familiar with a specific home's community or may be from out of the area.

One other complication has been delays of property inspections resulting from additional parties now required in the ordering process.

In order to best be prepared for the appraiser, it is recommended that both buying and selling agents involved in purchase transactions and homeowners in refinance transactions have information available for the appraiser to support a believed value for the transaction.

Show Me Some Great Rates
The Federal Reserve announced last November that they would start purchasing Mortgage-Backed Securities in an effort to inject liquidity into the mortgage markets and lower interest rates.

The immediate result was dramatic, causing rates to fall to the lowest recorded levels we have seen in our lifetimes. Available interest rates in the first quarter of this year were well into the mid 4.00% range for both 15 and 30 year fixed rates alike.

While current interest rates have climbed up since their low point, historically speaking, interest rates remain near all time lows and below the point set before the Fed made their announcement.

One very pertinent fact to this is that the buying of Mortgage-Backed Securities from the Federal Reserve is slated to stop on December 31, 2009. What is unknown at this point is what the immediate impact will be to mortgage rates when the Fed stops buying. Conventional wisdom would likely state that rates will rise as the market returns to a normal selling process for Mortgage-Backed Securities.

The biggest question though is in what time frame will any impact be felt? The best path to follow for taking advantage of lower interest rates is to ensure any new loan closes before the end of the year.

Show Me Some "Underwater" Rate Relief
When the Making Home Affordable Refinance Plan was first released, people that experienced declines in their property values below their existing mortgage amount were offered the ability to refinance. The ability to refinance though was limited to people whose new loan amount would not exceed 105% of the new appraised value. An example of this would be that if a home was to appraise at $100,000, a new loan amount of $105,000 could be originated on behalf of a homeowner.

Changes to the Making Homes Affordable Plan were recently enacted to allow for homeowners to refinance with a new loan up to 125% of the homes value. An example of this would now be that a homeowner could refinance a new loan to $125,000 with a home that would appraise at $100,000.

Show Me Some Payment Relief
People who find themselves in need of payment relief but are unable to refinance due to credit qualifications or property valuation may be eligible for a loan modification. A loan modification is an adjustment to the original terms of an existing mortgage to help someone obtain a more affordable payment.

A reduction in payment can be achieved through any single or multiple changes in the current terms including a change in rate, the length of time remaining on the note, the allowance of interest only payments and possibly a reduction in the principal balance of the loan.

When obtained through the Making Home Affordable Plan, the intent is to bring the qualifying mortgage payment(s) to 31% of a borrower's monthly adjusted gross income. To qualify for this plan, the mortgage must be owned by Fannie Mae or Freddie Mac.

Due to securitization of many mortgages in the last ten years, many mortgages are not owned by either agency but that does not mean that non-agency loans are ineligible for modification. In fact, many non-agency loans are being modified.

It is possible for distressed homeowners to modify their mortgage on their own, however the process has been described as very difficult and many legitimate modification companies have reported that people attempting to do it themselves have not obtained the best results possible.

If someone needs assistance in determining the best path to take, reaching out to their servicer or a professional modification company is suggested. A professional and legitimate modification company will offer a free consultation before proceeding to make homeowners aware of their options.

In either situation, people seeking a modification need to be prepared to offer a lot of documentation to prove they are experiencing hardship. One important point to remember is that while many people have been taken advantage of by illegitimate modification companies, many others are finding the use of a professional to be worthwhile.

Also, while the government is stating that people should not work with a modification company, both Fannie Mae and Freddie Mac are both run by the government and it is in the best interest of taxpayers to minimize reductions in existing mortgages owned by the agencies.

Regardless of Your Situation – Act Soon
Many government sponsored programs are now in place to assist people with both purchasing and refinancing their mortgage. However with the different deadlines in place, the time to take advantage of these programs is now.

Also, with additional legislative requirements impacting the loan process, proper expectations need to be in place before scheduling closing dates.

8:22 PM - Sep. 21, 2009 - comments {0} - post comment

Paint up, fix up

Like many home improvement jobs, a painting or coating job can be daunting. To exacerbate the issue, consumers-more so than in the past are looking for a “big change” from a painting project (60% in 2009 versus 47% in 2008), according to a study of U.S. households recently released by The Valspar Corporation, a leader in the paint and coatings industry.

“Consumers looking to achieve big changes should look to painting and additional coatings projects to dramatically change the look of a home,” said Scot Karstens, vice president of Architectural Coatings, The Valspar Corporation. “For example, consumers can boost curb appeal and increase the value of a home by changing the color of a family room, staining a deck to enhance the wood’s natural grains and applying epoxy floor paint to the garage. Best of all, coatings projects are much less labor intensive than a remodel or repair job.”

Fresh Coat = Fresh Look
According to Valspar’s third annual “paint angst study,” while consumers are looking for big change with a paint project, roughly one in five consumers (19%) identify color selection as putting the “pain” in painting. When it comes to color choice, 60% of consumers gravitate towards a neutral palette rather than a bold color (27%), which can make it difficult to achieve a major transformation.

However, Ann McGuire, founder of Beehive Studios and Valspar color consultant, says it’s possible to choose a neutral color and accomplish a big change. Choosing a color that is a shade darker or lighter from the original neutral chosen can offer a more distinct look.

When consumers do choose to go bold, green is the most popular choice (42%), followed by yellow (33%). Green is a consistent favorite due to the color’s prevalence in nature and ability to blend with the home’s interior. With cleaner yellows making a splash in fashion and home décor in the past year, softer yellows can be a nice option. Additionally, consumers don’t need to re-paint the whole house to make a big impact. By changing just one room within the house, the rest of the home takes on more interest. For maximum effect, try working on a central room within the home like the family room, entry way or hall way.

All Decked Out
Beyond painting, consumers can vastly upgrade the look of their home by staining or re-staining the deck. In fact, Remodeling Magazine’s 2008-2009 Cost versus Value report indicates projects that enhance a home’s curb appeal-such as siding and decks-consistently have the highest return on investment.

Stains can enhance a wood’s natural appearance and add color to complement or match your exterior decorating scheme. In the summer months, decks take a beating from UV rays, foot traffic, drink spills or barbecue grills. A clean deck is a durable deck, so homeowners should clean the deck every one to two years and re-stain every two to four years for maximum longevity.

Polish it Up
While painting and staining are more common do-it-yourself projects, concrete coatings can set a home apart from the rest of the block. A recent consumer survey revealed that more than half (53%) of U.S. households that have an outdoor living space say the surface has concrete. With concrete coatings, consumers can protect their concrete, add a polished and decorative look to a garage floor, enhance the walkway leading up to the front door, or match the outside patio to the rest of the home’s décor.

8:19 PM - Sep. 19, 2009 - comments {2} - post comment

Play a game, win a house?

Play an online game, win a house. It sure may sound too good to be true, but it is indeed a legitimate offer being made by a new website called Play4Property.com.

How Does Play4Property Work? Participants wanting to try to win the available house for that period simply register at the site, pay a $35 entry fee, and play a game of skill called “Spot the Ball”. In the game, players are presented with a picture of people playing a sport, like soccer. In the picture the ball has been digitally removed. The people in the photo are looking at where the ball used to be- and players have to determine the precise spot where the ball is and place a virtual pin as close to the exact middle of the invisible ball as possible to win. When the competition ends on the announced date, the Play4Property’s legal team and sports experts analyze the submissions to determine which participant’s pin is placed closest to the precise center of the ball.

The value of the available house depends on the amount collected in entry fees and is based upon the number of players who have competed in the game for that property. Properties can range in value up to $5 million.

There are actually two types of competitions people can enter at the site. The main competition, describe above, or players can try the Instant Win competition for just $7.50 per play. In Instant Win, if a player picks the exact co-ordinates of the ball, they instantly win a prize, such as a laptop.

Anthony Davis, Play4Property.com’s Managing Director, says that the odds of winning at his site are around 1 in 15,000. That’s much better than the chances of winning the lottery (about 1 in 120 million). And unlike the lottery, this Play4Property.com game actually requires the player to think. “It’s not all about luck”, Davis says, “which makes it much more fun to play.”

But the game isn’t just for those hoping to win a new house. Sellers can also use the site to market their home. Instead of wondering about buyers’ financing or dealing with annoying open houses, sellers can contact Play4Property, upload a description of the house and some photos, and their property can begin being viewed worldwide

8:06 PM - Sep. 17, 2009 - comments {0} - post comment

Is it time to worry about inflation?

If you've seen the news lately, you know concerns about inflation are increasing. But what does this really mean to you?

Let's start with what it means in general. The Bureau of Labor Statistics defines inflation as the "upward price movement of goods and services in an economy." There are a variety of indices that measure different aspects of inflation-including the Consumer Price Index, whose latest reading showed that the cost of living in the US rose more than forecast due largely to a jump in energy costs.

The fact is that inflation is a very serious issue that many traders, legislators and lenders are concerned about because it will likely be on the rise as 2009 proceeds.

How Does Inflation Impact Interest Rates...and Why?

The bottom line is that as inflation increases, home loan rates will rise too. That's because lenders know that a rise in inflation actually diminishes the value of the money they receive over the life of a loan, as the money they receive for payment simply won't go as far. So when they see changes in inflation or even anticipate a rise, they increase their interest rates to make up for the loss in future buying power that will happen as a result of inflation.

Two Resources to Learn More...

To help you learn more about this important topic, take a look at two important links.

The first link takes you to a short news clip featuring the nation's foremost mortgage industry expert, Barry Habib. In this video, you'll learn how inflation impacts interest rates and what the outlook is for down the road.

The second link is as much educational as it is fun.

The Bureau of Labor Statistics has included a CPI inflation calculator on its website. This easy-to-use calculator allows you to see how much your money was worth in an earlier period-and vice versa. Simply type in an amount of money, select the years you want to compare, and hit the "calculate" button. The results are instantaneous...and may surprise you!

For instance, did you know that $33.66 in 1979 had the same buying power as $100 in 2009? That's a huge change in the last 30 years. This is a great way to see how inflation impacts your buying power. You can even use the CPI inflation calculator to have a discussion with children about inflation...and show them how much the value of a dollar has changed over the years.

7:50 PM - Sep. 15, 2009 - comments {0} - post comment

Why buying is better than renting

Christine Van Tuyl and Margaret La Grange, an award-winning mother-daughter team with Prudential California Realty in Coronado, have compiled their latest list, the “Top 7 Reasons Why it’s Better to Buy then Rent in 2009.”

“Many renters are realizing that the increase in affordability- combined with low interest rates and tax incentives- are tipping the scales away from renting and towards homeownership,” said Christine Van Tuyl, agent with Prudential California Realty. “Simply put, some renters are finding that they can get a bigger bang for their buck if they buy.”

Following are the top 7 reasons why it’s better to buy than rent in 2009

1. Buying doesn’t always cost much more than renting. According to a recent study by the Associated Press, the gap between monthly mortgage payments on a median-priced home and the median rent has decreased from $777 to just $221 in the last three years.
 

2. Affordability is at an all-time high. In markets across the nation, including the inland areas of California, prices have declined by nearly 40%.
 

3. Buyers can take advantage of tax benefits of home ownership. Perhaps the biggest tax break is reflected in the house payment homeowners make each month. For most, the bulk of that payment goes towards interest. All interest is deductible, unless the amount is more than $1 million. Property taxes are also deductible.
 

4. Buyers can purchase homes with little or no down payment. Qualified first-time buyers may be eligible for loans insured by the Veterans Administration (VA), which does not require a down payment. Another loan product gaining popularity are those insured by the Federal Housing Administration (FHA), which require only a down payment of 3.5%.
 

5. The Tax Credit. First time homebuyers-defined as anyone who hasn’t owned a home in the last three years- are entitled to an $8,000 tax credit. (Ownership of a vacation property or a rental property doesn’t disqualify homebuyers from this program.) No repayment is required for homes sold after 36 months of occupancy and ownership.
 

6. Mortgage rates are at all-time lows. Take advantage of low 30 year fixed rates. We haven’t seen rates this low in the last 3 decades.
 

7. It’s yours. It feels good to own your own home. After all, you can paint it any color you want, make improvements, and plant a little garden.

12:46 PM - Sep. 13, 2009 - comments {0} - post comment

Energy efficient homes of the future

This article is from Arizona Housing.

In these economic times, the decision to purchase a home has become a very serious consideration, with cost of ownership in both the short and long term being in the forefront of the buyer’s mind. One of the most important factors consumers should consider when buying a home is its energy efficiency rating, as this can add up to substantial savings over the life of the home. Today’s energy efficient manufactured home is no different from any other home, except it has been built off-site, usually in a controlled factory environment, using the latest in energy efficient technologies. Coupled with a lower cost per square foot as compared to site-built homes, today’s manufactured home is a smart investment for savvy homebuyers.

Each manufacturer may have a different label, but one that stands out is the Energy Star designation. The Environmental Protection Agency (EPA) created the Energy Star logo as the symbol for energy efficiency because of the direct link between wasted energy and air pollution. Manufacturers and builders voluntarily display the logo on products and new homes that meet or exceed high energy efficiency guidelines. Some of these everyday products include heaters, air conditioning units, household appliances, residential light fixtures, and new homes. The Manufactured Housing industry is proud to display this designation on its quality homes.

By implementing these standards into the construction of today’s manufactured home, consumers and builders alike can reap the benefits of energy efficient housing solutions, further emphasizing a manufactured home is not any different when it comes to energy efficiency. Manufacturers who utilize energy efficient light fixtures and appliances show that they are doing their part to help preserve and protect our precious natural resources, while offering the consumer significant savings on their utility bills. Combined with an almost 30% savings on heating, cooling and hot water, manufacturers make it possible for the consumer to afford more home, due to the lower cost per square foot that is inherent to the factory construction process.

Another advantage of today’s energy efficient manufactured home is the tight construction that helps reduce levels of indoor pollutants, such as dust, mold, carbon monoxide, radon gas and pollen. Proper ventilation helps prevent the accumulation of unhealthy air and humidity within the home. Tight construction also means less maintenance is required, and the more money the consumer saves.

Energy experts agree that energy efficient homes are the only home choice today. Energy efficient dual-pane windows not only minimize heating and cooling loss, they also help protect the interior and contents from sun fading. With less energy loss, heating and cooling equipment performs more efficiently, maximizing its life span. The temperature inside is also more easily controlled and maintained while noise levels from outside sources are reduced to comfortable levels.

12:43 PM - Sep. 11, 2009 - comments {0} - post comment

Top 10 travel tips

Members of Priority Pass, one of the world’s largest independent airport lounge programs, recently gave their top travel tips in response to a survey.

The wide-ranging advice is a useful check-list for anyone preparing for a trip, and covers tips to save money, avoid stress, protect yourself and your belongings, and much more.

1. Protect laptops and essential business documents. A stolen or damaged laptop can ruin more than just a business trip. If vital documents are on it, it can be a commercial disaster. Make sure vital documents are backed-up and ensure that any sensitive information on your laptop is securely encrypted. If you are making presentations on a trip, then it’s wise to take them on a USB stick. Don’t check your laptop into the hold of an aircraft, unless you are not really bothered about seeing it again.

2. Get adequate insurance. If you travel frequently, it can be easy to get blasé about insurance, but having adequate coverage for all eventualities can be the wisest investment you will ever make. For frequent flyers, an annual policy makes sense, but don’t choose the cheapest without comparing deals.
it again.

3. Think about medication, glasses and more. Unless you’ve been stuck in a foreign land without the right medication, it may not occur to you how important it is. If you have prescription drugs, make sure you take enough with you, and it’s always wise to have a mini-medicine cabinet of essentials at hand. Less obvious are glasses and contact lenses. If you’re one of those people who would really struggle without your glasses, then take a spare pair with you- and maybe the prescription too. Losing or breaking glasses may not happen often, but if it does it can be highly inconvenient. If you’re travelling to more exotic destinations, don’t forget to check what immunizations you need- and whether you need certification of that with you in order to enter the country.

4. Control the cost of keeping in touch. If you don’t plan ahead, it can cost a fortune to stay in touch while travelling. Expensive roaming charges on your mobile phone, wi-fi charges to check your emails using your laptop, even just receiving calls and texts on your mobile- they can all add up to a lot more than you expect. Make sure you have selected the best mobile tariff for international calls, and plan ahead for wi-fi access if you plan to use the Internet a lot. You can save a lot of money by signing up to a global wi-fi access deal.

5. Overcoming jetlag. Priority Pass members find jetlag one of the most negative aspects of long-distance travel- and also one of the most difficult to overcome. Just as jetlag affects everyone differently, it seems that everyone has a different theory on how to get over it. The most common advice is that you should set your watch to the time in your destination as soon as you start your trip.

6. Avoiding airport stress. More than ever these days, airports are an ordeal rather than a pleasure and Priority Pass members had a number of suggestions to minimize the stress levels. Online check-in, when available, is one obvious solution, and ensuring that you know the airline’s baggage limits is another. With many no-frills airlines getting tougher on the weight of bags, it can come as a nasty shock if you have to get your credit card out at the airport, and you may find yourself paying more for your baggage to travel than for yourself.

7. Avoid excessive charges on foreign exchange and credit cards. It’s always a good idea to think about how you will pay for things on your trip. Does your bank charge a fee every time you use a card abroad? Will your card work at all when you are abroad? Another banking query that arises more these days is that you will be offered the opportunity to settle your bill at a given exchange rate so you can see the amount in your home currency. The general advice is not to do so, as most reputable banks will beat the rate offered by shops or restaurants.

Finally, if you are changing money, watch out for “commission free” deals that can actually work out to be very expensive because of the terrible exchange rate.

8. Getting an upgrade. Upgrades happen, but it seems not to be something you can plan for. Our feedback is that dressing relatively smartly and being friendly and polite at check-in helps, and it doesn’t do any harm to ask gently if there is any possibility of an upgrade.

9. Don’t be selfish - think of others. This is not exactly a tip, but a plea. One of the biggest complaints travelers have is selfish behavior of others; things like talking loudly on a mobile phone, or playing loud music through headphones.

10. And finally - enjoy yourself. This may sound daft, but sometimes the stresses of a journey can almost hide the pleasures, especially if it’s a business trip. But a lot of Priority Pass members made a point of saying that those who are fortunate enough to travel on business should ensure they appreciate how lucky they are. Yes, airports can be a pain, delays can be very frustrating and jetlag can leave you feeling wretched. But seeing new places and cultures is a thrill that not all can enjoy, and is something to be savored. Even on a business trip, try to leave a little time to explore your surroundings.

12:25 PM - Sep. 9, 2009 - comments {3} - post comment

New closing time lines

7:03 PM - Sep. 7, 2009 - comments {0} - post comment

Consider a stock secured loan

This article is by Joel Greene, mortgage broker and President of Condo Hotel Center.

With real estate values continuing their nosedive to astounding new lows, the one thing that prevents investors from taking advantage of the great buying opportunities is the scarcity of money.

Despite their federal bailout, banks still aren’t ready to open up the cash tap.

Most borrowers won’t meet the more severe regulations imposed by Fannie Mae and Freddie Mac. 

Home equity loans, with all their complex paperwork and extra costs have lost their appeal.  Plus, with today’s deflated values, these loans aren’t an option for most home owners.

Investors don’t want to secure private funds if it means paying 10-12 up front points or high interest rates. 

Even wealthy individuals who want to leverage what they have can’t get loans, despite their cash reserves. 

So how can investors get financing for real estate when it’s as elusive as Big Foot?

Stock-secured loans.  This new financing option is rapidly gaining popularity.  It lets borrowers use their stocks or other securities, (mutual funds, CD’s, bonds or treasury notes), as collateral for loans, up to 85% loan-to-value in some cases. 

Part of their appeal is that the process for obtaining these loans is surprisingly simple.  The real estate being purchased does not need to be appraised.  The borrower doesn’t have to furnish lots of documentation (tax returns, employment records, etc.).  And no credit checks are done.  The only thing required is a stock or securities portfolio to use as collateral.

Best of all, borrowers don’t have to liquidate any of their holdings, a real plus since values right now are at record lows.  They simply use their securities as collateral, even as those holdings continue to grow!

While most people seek stock-secured loans to purchase real estate, they also can be used for almost any other purpose, from paying for college to financing an overseas trip, a new business or even a yacht.  Again, if the borrower has stocks or securities, they most likely can be tapped for money right now.

For that reason, stock-secured loans even work for people who want to purchase homes but won’t qualify for traditional financing, either because they lack cash for a down payment, have poor credit, don’t have a job or have past foreclosures or bankruptcies in their past.

Borrowers can obtain stock-secured loans ranging from $50,000 to $200 million.  Currently, interest rates start at 4.99%, interest only.  Terms are typically 2-7 years. 

At the end of the term, a balloon payment of the loan’s balance is due.  The borrower then can do any of the following:  a) refinance the loan, b) sell the stocks pledged as collateral to repay the loan, or c) walk away from the shares pledged as collateral.  No matter which option is chosen, there is no recourse, and the loan is considered paid off.

In today’s tight-credit economy, stock-collateralized loans offer a viable alternative and are certainly an option worth considering for anyone seeking to invest in real estate or other major purchase.

6:30 PM - Sep. 5, 2009 - comments {0} - post comment

Cleaning uses for common household items

These ideas are from Front Range Inspection:

Hot sauce cleans copper-Rub it on dulled copper, rinse with water, and polish clean with a soft rag.
Olive oil brightens up wood-Use a thin coat to hydrate worn, dried-out wood, as long as it was originally treated with an oil finish. Finish by buffing it in.
White wine removes red wine-The first step in removing red wine stains is dousing the spot with white wine. Just blot with a clean rag to absorb the spill.
Vinegar cleans brushes-Boil a cup of white vinegar and rest hardened bristles in it overnight.
Cornmeal soaks up grease-Cover a fresh grease stain with cornmeal, let it sit a few hours, and sweep it up.
Baking soda removes tape residue-Make a thick paste of baking soda and water. Rub the paste onto bits of tape, then wipe clean.
Kitty Liter soaks up grease and oil stains on your concrete including the garage- Pour the kitty litter on the stain or spill completey cover the area and grind it in with your shoe, give it some time it will draw out the stain.

2:09 PM - Sep. 3, 2009 - comments {0} - post comment

Green remodeling

This article is fromFront Range Inspection.

As homeowners consider health issues, skyrocketing energy costs and Earth's natural resources. Green remodeling may increase the value of your home. The driving force behind green remodeling is energy conservation. The average home today uses systems for heating, ventilation and air conditioning, and some homes were not built as efficiently as they could have been, resulting in high energy consumption. The U.S. Department of Energy believes if current buildings were green-improved, they would use $20 billion less in energy per year. Green remodeling puts a strong emphasis on making homes as efficient as possible with modifications such as energy-efficient appliances and programmable thermostats. There are many sources that contribute to the air quality inside a home, including: pollutants brought in from the outside, toxic chemicals existing inside the home, and the activities of the occupants. Major contributors are tobacco smoke; smoke from the burning of wood, coal, kerosene or other such substances; toxic fumes from sealants or chemicals from cleaning products; lead paint; asbestos from insulation; damp carpets or fabrics; and certain pressed-wood furniture products that release chemicals into the air. Green remodeling seeks to remedy these problems with things such as better ventilation systems and using wood, paint, and sealants that are nontoxic. Reduced material waste and resource conservation. When remodeling a home, there is often a large amount of construction waste. Because 85 - 90% of those materials can be recycled, green remodeling focuses on reducing this waste during remodeling and reusing materials whenever possible. Some of the methods are using local materials, building with engineered lumber, and using recycling companies to remove waste are all ways this can be achieved during remodeling.

The benefits of green remodeling include:
-Reduces operating costs by increasing efficiency
- Conserves natural resources
- Non Toxic paints and sealants
- Improves indoor air quality
- Reduces waste
 

2:07 PM - Sep. 1, 2009 - comments {0} - post comment

Making your lawn look good

hese ideas are from Briggs & Stratton - makers of lawn mowing equipment.

With record low mortgage rates, expanded FHA loans and tax credit incentives, many Americans have plunged into first-time home ownership. In fact, the National Association of Realtors reports that first-time buyers accounted for 29 percent of existing home sales in the last month. But while taking advantage of the current incentives, many first-time buyers don’t think of everything that comes along with home ownership - including how to take care of their yard so they remain rightfully proud of their new castle.

Briggs & Stratton Corp., a leading manufacturer of lawn mower engines, offers these lawn care tips for even the most challenged green thumb.

Choose the right mower.
Purchase a mower with a quality engine. Elements to consider are torque, emissions and ease in starting. Briggs & Stratton engines are found in eight of the top 10 selling lawn mowers brands. To understand more about why engines make a difference, visit www.enginesmatter.com.

Never cut more than one-third of the grass blade during any one mowing.
By following this rule, the remaining two-thirds of the plant will develop deep roots and spread out, eventually creating a dense, healthy turf. Using this technique, of course, means shorter intervals between mowings during high growth times, but a healthy lawn is the best medicine for preventing weeds and disease.

Alternate your mowing pattern.
Try not to follow the same path each time you mow. Think of a clock. Start at the 12 o’clock position and mow to the 6 o’clock position. The next time you mow, begin at the 9 o’clock position and mow to the to 3 o’clock position. The third time, mow from 1 o’clock to 7 o’clock, etc. Changing the mowing pattern every time you mow will keep the turf and soil from compacting and prevent wheel patterns in your lawn.

Water early in the day.
Watering between 4 and 9 a.m. helps ensure that the sun won’t rob moisture from your lawn. It also gives your lawn the best chance to dry in the morning. Wet grass at night can lead to disease. Most lawns need about 1-2 inches of water a week to stay healthy.

Avoid a fertilizer overdose.
Even good medicine causes harm when used improperly, so avoid doubling the recommended rates of fertilizer as well as seed, herbicide, insecticide, etc. One pound of water-soluble nitrogen per 1,000 square feet is the maximum amount established lawns should receive at one time.

1:45 PM - Aug. 30, 2009 - comments {0} - post comment

5 ways to raise your credit score

Purchasing a home can feel overwhelming for buyers no matter how many times they've been through the process. And today, your credit score is more important than ever when it comes to your ability to buy the home you really want. If you are looking to improve your credit score, now is the perfect time to get started. Here are some great strategies you can utilize right away to give your score a little boost. And check out the accompanying video with Linda Ferrari from Credit Resource Corporation for even more details.

Create Some Balance: While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts without discussing it with your mortgage professional first. Cancelling those cards may inadvertently undo all of your hard work.

Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.

Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don't report your information to all three credit companies – this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you're in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no.

Protect Your Interests: Your credit is calculated based solely on the information available to your creditors. If you have a HELOC, make sure it's listed as a mortgage or an installment account on your credit reports and not a revolving debt. If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported correctly, that is with a zero balance. This action could increase your score by 50-100 points. Because simple mistakes like these can wreak havoc on your credit score, it's important to monitor your credit every four to six months.

Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. For the fastest results, visit the appropriate credit bureau's website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail.

With just a little bit of effort, you could be well on your way to a higher credit score...and to owning the home of your dreams!

7:00 PM - Aug. 28, 2009 - comments {0} - post comment

Important dates for home buyers

There's no place like home," so the famous saying from The Wizard of Oz goes. And this year, that saying applies to many new home owners, as first-time home buyers (FTHBs) have accounted for 53% of total residential real estate purchases during parts of 2009. For those of you who have already bought a home, congratulations. For those of you still waiting, this is a call to action: It's time to get moving.

While it's true that the best environment home buyers have ever seen may have been from January to late May of this year, outstanding opportunities still exist for those who act soon. If you are planning to buy a home, there are important dates on the calendar that you need to take note of so you can act accordingly. These dates represent money-saving opportunities for consumers.

We May Never See Rates This Low Again
Beginning in late November last year, 30-year fixed rates plunged into the mid 4.0% range. So what prompted this precipitous decline? The Federal Reserve announced that they would start purchasing mortgage backed securities (MBS) issued by Fannie Mae, Freddie Mac and Ginnie Mae. The Fed made this decision because there was a lack of liquidity and buyers in the fixed income securities market. By becoming a buyer for the securities that determine interest rates, the Fed helped lower rates to stimulate the economy by absorbing supply not picked up by others in the markets.

Following the announcement by the Federal Reserve, home loan rates immediately responded, falling a full percentage point. When the buying started, home loan rates fell even more, sparking a frenzy in refinancing and buyers seeking financing.

However...and here's what you need to note...this program implemented by the Federal Reserve has a deadline! That deadline is December 31, 2009. And as the Federal Reserve has been the primary buyer for MBS, purchasing up to 85% of all MBS since March, the impact to rates when the program ends could be as dramatic as when the program was announced. This means that interest rates could conceivably rise to well above 6.00%.

In the month leading up to the announcement, interest rates had been exceptionally volatile, peaking on some days near 7.00% for a 30-year fixed rate loan with no points and fees. This kind of volatility often happens when investors are reluctant to purchase MBS and trading volumes in securities are light, causing rates to rise quickly if investors demand a higher return for their investment.

While the final impact to interest rates will have to play itself out, one thing is certain: without the Federal Reserve as a primary buyer of MBS, home loan rates could be primed for a spike if other investors do not pick up the slack that could result in 2010.

It is unlikely that interest rates will return to the sub-5.0% range again this year. Why? The purchase and refinance mortgages that have already occurred this year were packaged into Mortgage Backed Securities after they closed and were sold on the secondary markets. This added supply to the markets and the new Bonds simply outweighed what the Fed had allocated to buy. Still, the Fed's program is helping slow down the rate increases we are seeing...but remember; their program is due to end on December 31. That's why now could mark the lowest rates that will be seen for some time to come.

Would You Like $8,000? Buy a Home. Soon!
To stimulate the economy, Washington juiced up the stimulus plan passed last year in February. Two benefits for FTHBs were that the amount of the tax credit was increased from up to $7,500 to $8,000. And, more importantly, the amount of the credit does not have to be repaid!

To qualify for the credit the individuals buying a home cannot have owned a home in the last three years. So, while the credit is discussed as a credit for first-time buyers, anyone who has not owned a home in the last three years is eligible.

There are income limitations to fully qualify but they are quite liberal. Single tax filers earning up to $75,000 and joint filers earning up to $150,000 based on modified adjusted gross income can earn the full credit. A partial credit is available for those earning up to $95,000 and $170,000 respectively.

The amount of the tax credit is based on a percentage of the price of the home, specifically 10% of the purchase price, up to $8,000. This means if someone purchases a home for $70,000 their credit would be $7,000 and if the amount of the home purchased is $100,000, the credit would max out at $8,000.

Note! The deadline to take advantage of this opportunity is November 30, 2009. Close in December, and you just lost $8,000.

Homes Have Never Been More Affordable
FTHBs are leading the way, taking advantage of one of the best home buying opportunities ever, providing support for the real estate market. As indicated earlier, FTHBs have accounted for as much as 53% of purchases for any month this year.

Who can blame them? In short, no one. Home prices have fallen to levels not seen in years and interest rates hit their lowest point ever. This combination led to the highest home affordability ever recorded.

The National Association of Realtors® tracks what is known as the Home Affordability Index. The Home Affordability Index is arrived at as a function of both median home prices, available interest rates, and median family income.

The index represents the amount of monthly income that is required to pay a mortgage payment. In 2005, approximately 23.3% of a family's monthly income was required to carry a mortgage payment. With falling home prices and interest rates, the percentage of monthly income required to pay a mortgage payment is now approximately 15%.

This means that for a family at the median income level purchasing a home priced at the median income level, the monthly mortgage payment has declined nearly 36%! This is great news for anyone shopping for a home today.

Get Busy, Time is Short!
In order to take advantage of both the available tax credit and low interest rates, anyone going into contract should strive to have their purchase agreement not later than mid-October. This will allow some time cushion in the event anything pops up in the purchase process and still allow for closing in time to take advantage of the available tax credit.

Home prices have fallen to levels not seen since the start of the decade in many parts of the country, interest rates are still near all time lows, and the availability of free money from the IRS all mean that the time to act is now. It is always easy to look back and identify times people should have acted, and this could well be one of those times people will look back and say, "Wow, I should have bought a home in 2009!"

6:57 PM - Aug. 26, 2009 - comments {0} - post comment

Selling your home in a foreclosure driven market

This article is by Relocation.com

For home owners contemplating selling their homes in the current market, Relocation.com, a leading online consumer resource for moving services, offers several tips to help sellers maximize the final sale price, get the home sold quickly and move on to their new home. While many factors come into play with finding the right buyer at the right time, there are many things sellers can do to help put the odds in their favor.

“Despite the tough economic times, people who want to sell their homes don’t have to wave a white flag in surrender. Relocation.com wants to help educate consumers about the selling process so that they can make smart decisions about moving to a new home,” said Sharon (Ron) Asher, chairman and founder, Relocation.com. “With these sales strategies, consumers can get their homes sold and on to moving into their new residences.”

Tips for Selling a Home in Today’s Market

1. Do not overprice the home. Buyers today are looking for a bargain, and the seller in the end will likely have to bring the price down to meet market demands. The longer the home sits on the market, the stronger the negotiating position of the buyer.

2. Select Internet-friendly pricing. More than 80% of home buyers begin their real estate searches online. Most real estate sites filter the prices in $25,000 to $50,000 increments. So while a creative price of $555,777 may grab attention, buyers who set their search maximum filter at $550,000 will exclude it. Additionally, prices ending in 000 (such as $500,000) tend to sell at a larger discount than homes ending in 500 (such as $524,500).

3. List the home on a Friday. Most buyers are checking out new listings on Fridays so they can see what is new for the weekend.

4. Occupy or stage the home. Buyers appreciate a home that is well attended. A vacant home typically feels cold and empty, while one that is still occupied has a warm, cozy feel, attracting more buyers. However, keep the personalization minimal; having neutral decor and paint colors will make it easier for a buyer to visualize their own style in the home. If a seller moves to a new residence before selling the old residence, it is a good idea to have the home professionally staged as if someone still lives in it.

5. Monitor local foreclosures. Foreclosures are costing sellers money and have become very aggressive opponents in today’s market. If the seller’s neighborhood has a lot of foreclosures, wait until they are sold before listing the home, if at all possible. Most banks are extremely eager to sell, thus creating an underpriced competitor. If the seller cannot wait to list the home, it will need to be priced competitively with the foreclosures, which can dig significantly into the home’s equity.

6. Keep the home neat and clean. With so many foreclosures on the market today, buyers are seeing homes at their worst. If the home is presented in the best possible way, it will attract more positive attention.

7. Keep records. Foreclosures do not come with any disclosures. Sellers who keep updated records, photos and permits handy for the buyer to review will make them feel much more confident about buying the home, giving the seller a competitive advantage over foreclosed properties in the neighborhood.

6:46 PM - Aug. 24, 2009 - comments {0} - post comment

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