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Homeowners’ Tax Credit Reminder

Many if not most states offer some sort of property tax relief for owners who meet certain criteria. Surprisingly many of our senior Reverse Mortgage borrowers who meet the qualifications for a reduction say they had no idea it was available and never applied for it.

In Maryland, anyone with household income less than $60,000 may be eligible, but you must apply every year by no later than Sept 1st. It is best however to submit the application by May 1 so that any credit due can be deducted beforehand from the initial July tax bill. Other state and local governments have different requirements.

For example, Fairfax County Virginia’s program for example starts at household income of $72,000 or less for those 65 or older or permanently and totally disabled. Those with $52,000 or less in household income may be eligible for 100% relief. Certainly worth looking into.

More information and the application for the Maryland Homeowners’ Tax Credit Program can be found on the Maryland State Department of Assessments & Taxation’s web site HERE. More info on Virginia’s program mentioned above is available HERE. If you need assistance locating guidelines in other areas, let me know.

Think about someone you know who might qualify for or benefit from this information and please share it with them.

8,004 reasons now is a good time to buy a house

Is real estate at the bottom?  Will rates ever be lower? Will you ever be able to qualify for a loan again?  I don’t know the answer to any of those questions.  There certainly may be a better time to buy a house but lets look at whether this is a GOOD time to buy (or maybe even really good).  Here are my reasons 1 – 8004 that now is a really good time to buy a house.   

Reason Numbers 1 – 8,000:  Cold Hard Cash

Our government wants you to buy a house so much they are going to give you up to $8,000 if you are under a contract by April 30th to buy a primary residence and close by June 30th.  As long as you meet those deadlines you will qualify for tax credits of up to $8,000 (for first time buyers or $6,500 for repeat buyers).  This is a tax CREDIT not a deduction.  The $8,000 is a direct reduction of the income tax you pay so it goes directly back in your pocket!  $8,000 in cold hard cash is yours for the taking.

Reason Number 8001: Really, Really Low Mortgage Rates

Ok, so this song sounds familiar but fortunately this is a good thing for you.  While not at absolute rock bottom, fixed rate mortgage rates are unbelievably low.  According to financial publisher HSH Associates, Nationally 30yr fixed rates averaged just under 5.5% for January 2010 while 15 year fixed rates dipped to 4.9%.  The likelihood of us seeing higher rates in the next few months is much higher than it is for them to drop further.  An increase of just 1/2% on a $300,000 loan means nearly $100.00 /mo increase in your monthly payment.  

Reason 8,002: Procrastinators will pay more in loan fees

As I mentioned in an earlier post, FHA is increasing the cost of its mortgage insurance by 1/2% to 2.25% for all loan case numbers issued on or after April 5th 2010.  That’s an extra $1,500 in up front cost on a $300,000 loan just for waiting.  There is no reduction for first time buyers. 

Reason 8,003: You may not get a loan later… really

According to the Wall Street Journal, Fannie Mae and Freddie Mac are stuck with about $300 billion in loans that are 90 or more days delinquent and they have unleashed armies of auditors to sift through files looking for underwriting flaws so they can force lenders to buy those loans back.  As lenders face increased loan buybacks, guidelines will continue to tighten.  Average credit scores for loans backed by Fannie and Freddie jumped 40 points from 720 just two years ago to a current level of 760.  What do you think happened to the people with scores in the lower range?  The answer is simple, they didn’t get loans.

Reason Number 8004: Great Deals are happening all around you

I’m going to keep this part simple.  There are some amazing deals to be had out there.  statistically speaking, home prices are beginning to stabilize in many parts of the country and buyers with a bit of patience remain in the driver’s seat when it comes to negotiating a great deal. 

What to do next?

  1. Gather all your financial information (w2’s, paystubs, bank statements, etc)
  2. Meet with lender (I am happy to recommend one) to get started with your loan approval
  3. Find a great agent that will help guide you through the negotiating and paperwork (can recommend one here as well)
  4. Make your best deal
  5. Figure out how to spend your $8,000 tax credit
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