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Planning to buy a house? It's one of the smartest decisions you can make—and not just because you'll be creating a wonderful home in the location of your choice. It's because homeownership has many tax benefits as well.
Homeowners may receive benefits from Uncle Sam when they purchase or sell a home, and tax advantages may even accrue during the period you own a home. That's why many people consider homeownership to be the ultimate tax shelter.
Here are just three of the possible tax-saving opportunities for homeowners*:
Mortgage interest deductions. Interest paid on a mortgage on a first—or even second—home is deductible for those who itemize. That reduces the cost of ownership. For example, someone who pays $10,000 in mortgage interest and who falls in the 25% tax bracket could save up to $2,500 in taxes each year. Generally, all the interest paid on a mortgage is deductible, unless the loan is more than $1 million.
Real estate tax deductions. Property taxes based on the assessed value of your home and paid to a state or local government can be deducted—whether you pay directly or through an escrow account. Your bank will provide you with a statement of the actual amount it paid. Also, remember to look at your settlement statement if you recently purchased a home. Any prepaid taxes for which you reimbursed the seller are deductible as well.
Capital gain exclusion for the sale of a home. Under current law, if you are selling your principal residence, you can exclude from taxation any profits up to $500,000 for married taxpayers or $250,000 for single taxpayers.
Call our CENTURY 21 office today so we can get you on the path to the home of your dreams.
* Consult a tax professional for details.
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Mortgage rates remained flat again this week as traders seemed to continue to hold a balanced view of the improving economy, muted inflationary pressures, and government support for financial markets. We did see a few more signs of improving conditions, and also reminders that we are still not on solid footing yet. The Fed also meet last week, leaving rates unchanged as expected. As the economy improves, it is very likely that the Fed will let various support programs expire, such as the $300 billion program of buying Treasury debt that expires in four weeks.
This is a jam-packed week of economic data for markets to digest. The reports include the final reading for last quarter’s GDP, the ISM Manufacturing Index, Consumer Confidence, and September’s employment report. After the Fed’s meeting last week, if the data comes in revealing growing economic strength, it would not be surprising to see mortgage rates beginning to trend slowly upward. However, if unemployment jumps to 10.0%, we’ll see rates stay low.
Compliments of
Eric Glick
Bank of America Home Loans
Home Loan Consultant
PHONE:
(912) 308-5931
FAX:
(866) 409-2128
eric.glick@bankofamerica.com
7150 Hodgson Memorial Drive
Suite A
Savannah, GA 31406
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Qualified first-time homebuyers now have another way to take advantage of the federal $8,000 tax credit for the purchase of a principal residence.
The American Recovery and Investment Act of 2009 created a tax credit of up to $8,000 for buyers purchasing their first home before Dec. 1, 2009. Previously, homeowners could only use this credit after purchasing a home and filing their tax return with the Internal Revenue Service. On May 29, however, the U.S. Department of Housing and Urban Development (HUD) announced that the Federal Housing Administration (FHA) will allow state finance agencies to provide second mortgages “monetizing” the tax credit.
What does this mean in plain English? That homebuyers can immediately use the $8,000 credit toward their down payment and closing costs for the purchase of homes with FHA-insured mortgages.*
This is great news for first-time homebuyers who want to take advantage of the low mortgage rates and competitive pricing of many homes today, but don't have enough money on hand for both a down payment and closing costs.
Homebuyers who obtain an FHA-insured mortgage are still required to have the 3.5 percent minimum down payment. But the tax credit can be applied to a down payment in excess of 3.5 percent of appraised value and could possibly help the borrowers obtain a lower interest rate by increasing the total amount down.
According to estimates by the National Association of Home Builders, 40,000 more homes will be purchased due to the new FHA monetization program, in addition to the 160,000 sales already expected, due to the creation of the credit.
For more information on the tax credit, or to learn about available homes in your area, call our CENTURY 21 office today so we can get you on the path to the home of your dreams.
* Consult a tax professional for details.
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Whether you're a first-time home buyer or an experienced investor, there's no better time than the present to purchase a house. Housing affordability is near its highest level in 18 years, and mortgage rates are near historical lows.
Still, credit remains tight, and obtaining a mortgage could be a challenge.
But that doesn't mean you can't get a mortgage. It just means you need to do your homework and pay attention to the details. Here are some tips to help speed up the process and increase the odds of hearing “yes” from your lender.
Clean up your credit. A solid credit record is vitally important these days. A few blemishes may not have mattered in years past, but today, they can make a huge difference in your interest rate and payments. Check your credit report and correct any mistakes before you apply for a loan. Experts say borrowers need a FICO score of about 720 to receive the most attractive mortgage rates.
Maximize your downpayment. Lenders today expect you to make a downpayment. The amount may vary depending on your particular circumstances, but the more you put down, the more comfortable a prospective lender will feel about the deal.
Have your paperwork ready. No-documentation loans are a thing of the past. Gather your personal information: bank and financial statements, W-2 forms and tax returns. You will be required to verify your income, employment and assets, so the more information you provide upfront to your lender, the faster and easier the process will be.
Downsize your debts. Consider paying down credit card or other debts before applying for a mortgage. The lower your debt, the greater the likelihood of being approved. Banks today are wary of those who are overleveraged.
For more tips on getting a mortgage, or for a referral to a lender in your area, call our CENTURY 21 Office today.
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The “recession is very likely over,” announced Fed Chair Ben Bernanke last week. While this may be technically true, markets did not react with the usual leap upward in interest rates. Instead, mortgage rates continued their very slow downward decent. While we may finally be in a period of economic growth, we may be far from a reasonable economic recovery. As long as unemployment remains elevated, we may see inflationary pressures held in check. This combined with a slow unwinding of federal interventions in financial markets may lead to a lengthy period of low rates. However, markets may react with rapidly increasing rates in significantly better-than-expected data is released, or if rumors of termination of certain government programs circulate.
The direction that mortgage rates move this week is very likely to be dependent on the Fed’s policy announcement on Wednesday. If the fed issues any surprises for the market, such as the termination of any support programs, we could see rates rise. Otherwise, they should stay fairly level.
Compliments of
Eric Glick
Bank of America Home Loans
Home Loan Consultant
PHONE:
(912) 308-5931
FAX:
(866) 409-2128
eric.glick@bankofamerica.com
7150 Hodgson Memorial Drive
Suite A
Savannah, GA 31406
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Inflation and Mortgage Rates Remain Low
A wide range of major economic data released during the week and comments from the Fed reinforced the consensus outlook for the economy. Economic growth appears to be on track for gradual improvement, while inflation is not a concern in the short-term. With few surprises this week, mortgage rates ended the week nearly unchanged.
The economy is currently experiencing moderate economic growth with low inflation. In a speech on Tuesday, Fed Chief Bernanke indicated that the recession is "very likely over". Retail Sales and Industrial Production showed nice increases this week. Housing Starts, Building Permits, and Homebuilder Sentiment also moved higher. Meanwhile, there have been few signs of inflation in the short-term. For example, Core CPI rose at a modest 1.4% annual rate, the lowest annual rate since February 2004. Tame inflation readings have helped mortgage rates stay at low levels.
Recently, the Fed has been purchasing about $25 billion of mortgage-backed securities (MBS) each week, which represents a very high percentage of the average new issues. At this pace, the Fed will purchase the entire $1.25 trillion authorized for the program by the end of the year, when it's currently scheduled to discontinue its MBS purchases. On Wednesday, at the conclusion of next week's Fed meeting, investors will be hoping to receive an update on the MBS purchase program. The majority outlook is that the Fed will purchase the full $1.25 trillion and end the program, possibly by gradually reducing the level of weekly purchases and extending them into next year. Still, a significant number of investors expect the Fed to increase the limit, while others think the Fed will end the program early. Since mortgage rates are largely determined by MBS prices, changes in the level of demand from the Fed could have a large impact.
Compliments of
Eric Glick
Bank of America Home Loans
Home Loan Consultant
PHONE:
(912) 308-5931
FAX:
(866) 409-2128
eric.glick@bankofamerica.com
7150 Hodgson Memorial Drive
Suite A
Savannah, GA 31406
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Investor sentiment about the economic recovery fell this week, and the stock market declined. Expectations for slower economic growth are favorable for bond markets, including mortgage-backed securities (MBS), and mortgage rates ended the week a little lower.
The important monthly Employment report showed mixed results. Against a consensus forecast for a loss of -225K jobs in August, the economy lost -216K jobs. This was the smallest level of monthly job losses since August 2008 and was far below the monthly average of -691K seen during the first quarter of the year. The biggest surprise in the data came from the Unemployment Rate, which jumped from 9.4% to 9.7%, the highest level since 1983. The unexpected increase was mostly due to previously discouraged workers returning to the labor pool to look for jobs. Average Hourly Earnings, a proxy for wage growth, rose at a moderate 2.6% annual rate.
The future of Fannie Mae and Freddie Mac made the headlines this week when the Mortgage Bankers Association (MBA) released its restructuring proposal. While the MBA suggested the elimination of the two agencies, it would replace them with new entities which would perform many of the same functions, with many of the same people. Its plan would maintain a government guarantee of principal and interest for MBS investors. The two agencies have played a pivotal role in keeping mortgage rates low and in expanding homeownership, and the MBA proposal would retain these benefits. It's very early in the process, and the Obama administration indicated that its proposals for Fannie and Freddie may not be revealed until early next year.
Compliments of
Eric Glick
Bank of America Home Loans
Home Loan Consultant
PHONE:
(912) 308-5931
FAX:
(866) 409-2128
eric.glick@bankofamerica.com
7150 Hodgson Memorial Drive
Suite A
Savannah, GA 31406
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As the news continues to proclaim that we are breaking free of this painful recession, mortgage rates continue to stay in a very tight range, remaining at extremely low levels. There is little doubt that this is contributing to some positive news in the housing marketing. According to the S&P/Case-Shiller 20-city home price index, we’ve now gone two months with prices actually increasing. While there are many elements necessary to moving out of this recession, stabilization in the housing market will significantly contribute to overall economic recovery. This week is a jam-packed week of important economic news. The ISM Manufacturing Index is expected to tic over the 50-mark, indicating the manufacturing is finally expanding. Employment data is also due on Friday, with expectations of minimal change to our present situation. Even if we have good economic news, we could see rates not climbing too severely as lenders are beginning to see lessening risks of foreclosures as the housing market shows signs of recovery.
Compliments of
Eric Glick
Bank of America Home Loans
Home Loan Consultant
PHONE:
(912) 308-5931
FAX:
(866) 409-2128
eric.glick@bankofamerica.com
7150 Hodgson Memorial Drive
Suite A
Savannah, GA 31406
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Mortgage Rates Hold Steady
There were few surprises in the economic data released this week, and the record $109 billion in Treasury auctions went smoothly. As a result, it was a quiet week for mortgage markets. This week's economic data showed signs that the economy is gradually improving, while inflation is not a concern right now. Demand remained solid for the Treasury auctions. Mortgage rates ended the week nearly unchanged.
Last week, the Fed increased its weekly mortgage-backed securities (MBS) purchases to about $25 billion, and it maintained that level this week. Prior to that, the Fed had purchased roughly $20 billion per week for a couple of months. The current pace would lead to total purchases of the authorized $1.25 trillion by the end of the year, which is when the program is scheduled to expire. Mortgage rates are largely determined by MBS prices, and the added demand from the Fed has helped to keep mortgage rates low. In a speech this week, the Fed's Lacker suggested that with the economy improving the Fed may not need to purchase the entire $1.25 trillion of MBS. Lacker's comments caused little reaction, as his views are often contrary to those of the other Fed officials, but if that were to happen, then mortgage rates would almost certainly move higher. Mortgage investors will be closely watching the Fed's plans for this program.
The housing data released this week was again positive. July New Home Sales rose 10% from June to the highest level since September. Inventories dropped to a 7.5-month supply, which was the lowest level since April 2007. This data follows a similar rise in July Existing Home Sales announced last week.
Compliments of
Eric Glick
Bank of America Home Loans
Home Loan Consultant
PHONE:
(912) 308-5931
FAX:
(866) 409-2128
eric.glick@bankofamerica.com
7150 Hodgson Memorial Drive
Suite A
Savannah, GA 31406
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With the Fed’s recent policy announcement, and the comments of various Fed officials over the last two weeks, many believe that the Fed will support low mortgage rates at least until we see economic growth return in earnest. This, combined with more news last week that inflation is not a near-term issue, helped mortgage rates ease back downward. Even with additional signs that the economy is coming back to life, including another increase the Leading Indicators, rates still moved downward.
Short of very unexpected economic news, mortgage rates do not have far to move downward. As has been the ease for some time, the potential for a spike upward is significantly higher that the potential for a large drop. This week holds two pieces of economic data that could move rates. Consumer Confidence is expected to recover some, but 2nd quarter GDP is expected to be revised to -1.5%. If we see Confidence rise significantly and GDP is revised upward, we could be watching mortgage rates climb as we move through the week. Otherwise, rates are likely to stay relatively flat.
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Strong manufacturing and housing sector data contributed to a rally in the stock market this
week. This would ordinarily push mortgage rates higher, but the strong economic news was
offset by tame PPI inflation data and a significant increase in Fed purchases of mortgagebacked
securities (MBS), leading to a small decline in mortgage rates during the week.
The national housing market data released this week was positive. July Existing Home Sales
rose 7% from June, to the highest level since August 2007, and were 5% higher than one year
ago. This marked the fourth straight monthly increase. Taking advantage of the $8,000 tax
credit, first-time homebuyers accounted for 30% of all transactions. Inventories of unsold homes
held steady from June at a 9.4-month supply.
In addition, the National Association of Home Builders (NAHB) Housing Market index rose to the
highest level since June 2008, indicating an improvement in home builder confidence. The
NAHB also reported that housing affordability during the second quarter of 2009 remained near
record levels. The improvement in home builder confidence was reflected in a fifth consecutive
month of increased single-family housing starts in July. High affordability, low interest rates, and
the first-time homebuyer tax credit combined to improve sentiment and stimulate housing market
activity.
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We all know the mortgage industry, and the requirements to qualify have tightened. The two big areas that affect a majority of the population are credit scores and down payment requirements. In the last 18-24 months, guidelines now require the borrower to have a little better credit score to qualify for the same type of loan program. Also, the required credit score to be granted maximum financing has increased.....most loan programs used to require a 580 credit score and now most loan programs require 620. In addition, mortgage programs do not allow the borrower to ignore as many open collections/charge offs. So the need for credit repair services have skyrocketed to the point where new companies are popping up and advertisements are everywhere. When considering a credit repair company, make sure you are not employing the services of a Consumer Credit Counseling Service (CCCS) that negotiates lower rate/payments as lenders view this as the equivalent of a bankruptcy. Think about this, a bankruptcy court provides relief by forcing creditors to accept a lower payment and a CCCS negotiates a lower payment for you. Both of these are the result of financial irresponsibility and taking on more debt than you can handle....which is not what you want a potential lender to think of you.
Visit www.RealEstateRanger.com for more information or contact the Real Estate Ranger Team
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Interest rates are offered with varying costs. If you call a lender today and get quoted 5.0% for a 1% origination point (1point = 1% of the loan amount) and hear tomorrow that rates have dropped, it doesn't necessarily mean that the same 1% (or 1 point) gets you a lower rate. Example: Today the following rate/fee combinations are offered 4.75% for 2.0 points, 4.875% for 1.5 points and 5.0% for 1 point. So the next day you hear rates have dropped and think you are going to get lower than 5% for the same 1 point fee, but are told the following: 4.75% now costs 1.875 points, 4.875% now costs 1.25 points, and 5.0 costs .75 points. This causes confusion for people who are not in the industry because they think they are going to get a lower rate for the same amount of fees. The confusion lies in the fact that it's not the rate that is dropping; it is the cost for any given rate that you choose. Visit www.RealEstateRanger.com for more information or contact the Real Estate Ranger Team
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While the economic data released during the week generally matched expectations, the outlook for future economic growth improved due to strong earnings reports, tame inflation data, and a revised forecast from the Fed. Stronger economic growth was good news for the stock market, and the Dow rose over 500 points. It was unfavorable for the bond market, however, and mortgage rates ended the week moderately higher. On Wednesday, the Fed released its minutes from the June 24 FOMC meeting, and most of the news was negative for mortgage rates. The minutes revealed an upward revision to the Fed's forecast for economic growth and inflation in 2009 and 2010. In addition, Fed officials expressed a strong reluctance to increase any further the program to purchase mortgage-backed securities (MBS). Mortgage rates are largely determined by MBS prices. When the Fed initially announced its MBS purchase program in November, mortgage rates immediately dropped, and they dropped again significantly when the Fed announced an increase in the program in March. The Fed has a substantial involvement in MBS markets, and any change in this program would have a major impact on mortgage rates. The housing sector data released during the week showed improvement. June Housing Starts rose 4% to the highest level in seven months. Building Permits, a leading indicator, jumped 9%. The national Association of Home Builders (NAHB) sentiment index increased to the highest eric.glick@bankofamerica.com level since September 2008. According to the NAHB, the first-time homebuyer tax credit, low mortgage rates, and "attractive" home prices are helping home sales. Week Ahead The economic calendar will be very light next week. Leading Indicators will come out on Monday, Existing Home Sales will be released on Thursday, and Consumer Sentiment will come out on Friday. In addition to the economic data, Fed Chief Bernanke will be testifying before Congress on Tuesday. Finally, Thursday's announcement about the size of upcoming Treasury auctions also may have an impact on mortgage rates. To learn more about news impacting interest rates and mortgage markets, go to www.mbsquoteline.com To learn more about the newsletter, please call 800-627-1077 All material Copyright © Ress No. 1, LTD and may not be reproduced without permission. Report courtesy of Eric GlickVisit www.RealEstateRanger.com for more information or contact the Real Estate Ranger Team
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Hunt Club, Pooler - Announcing a price reduction on 315 WINCHESTER DRIVE, a 2,364 sq. ft., 2 bath, 4 bdrm 2 story. Now  MLS® $200,000 - . Property information Visit all homes listed in and around Savannah, Pooler, GA at www.RealEstateRanger.com
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