Are there tax credits for first-time home buyers?

Many city and county governments offer Mortgage Credit Certificate programs, which allow first-time home buyers to take advantage of a special federal income tax write-off, which makes qualifying for a mortgage loan easier. Requirements vary from program to program. People wanting to apply should contact their local housing or community development office. Here is a list of four general requirements to keep in mind: * Some credit may be claimed only on your owner-occupied principal residence. *There are maximum income limits, which vary by locality and family size. * You must be a first-time home buyer, which means you must not have had any kind of ownership interest in a principal residence during the past three years. This restriction may be waived, however, if you are buying property within certain target areas. * Allocations must be available. A local MCC program may have to decline new applications when it runs out of funds.

The mortgage interest deduction entitles you to completely deduct the interest on your home loan for the year in which you paid it. Mortgage interest is not a dollar-for-dollar tax cut; it reduces taxable income. You must itemize deductions in order to do this, which means your total deductions must exceed the IRS’s standard deduction. Another point to remember is that the amount of interest on your loan goes down each year you pay on your mortgage (all standard home-loan formulas pay off interest first before significantly paying into principal). That’s why paying extra on your principal every year can help you pay off your loan early.

What home-buying costs are deductible?

Any points you or the seller pay to purchase your home loan are deductible for that year. Property taxes and interest are deductible every year. But while other home-buying costs (closing costs in particular) are not immediately tax-deductible, they can be figured into the adjusted cost basis of your home when you go to sell (any significant home improvements also can be calculated into your basis). These fees would include title insurance, loan-application fee, credit report, appraisal fee, service fee, settlement or closing fees, bank attorney’s fee, attorney’s fee, document preparation fee and recording fees. Points paid when you refinance an existing mortgage must be deducted ratably over the life of the new loan.

Are taxes on second homes deductible?

Mortgage interest and property taxes are deductible on a second home if you itemize. Check with your accountant or tax adviser for specifics.

What is the Mortgage Credit Certificate program?

The Mortgage Credit Certificate program allows first-time home buyers to take advantage of a special federal income tax credit. This program allows buyers credit in qualifying for the tax advantage they’ll receive after they purchase the home. The amount of the credit is tied to a local formula that every city with an MCC program must follow. A MCC credit, which can total $2,000 or more, reduces the borrower’s federal tax liability by an amount tied to how much one pays in annual mortgage interest. Both the borrower’s income and the purchase price of the home must fall within established guidelines. To see if your community has an MCC program, call your local housing or redevelopment agency. You also may inquire with your real estate broker or the local association of Realtors.

Are the costs of a natural disaster deductible?

Damage, destruction or loss of property from fires, floods, earthquakes and other disasters are deductible from both state and federal income taxes. In such a case, the IRS only allows a deduction less than or equal to the fair-market value of the property before the disaster. Losses on the sale of your own home are not deductible, through they are deductible for rental properties.

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The headlines are filled with the pros and cons of wall street bailout proposals for the financial system, but there is a little known ‘bailout’ for home owners that has already been enacted into law.

Section 1403 of the new housing bill that was signed into law on July 30, 2008 (HR 3221) requires mortgage servicers to modify loans for homeowners and help them avoid foreclosure.  There are three requirements to be eligible for the homeowner bailout:
1. Default on the mortgage either has already happened or is “reasonably foreseeable”

2. The home  is the primary residence

3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure

“The fact is that this law is effective immediately, and most distressed home owners are simply not aware that they have this option,” according to Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

“This law requires servicers to act in the best interest of all their investors and obligates them to modify your loan if you can afford the modified loan terms and if they are likely to recover more for their investors by working with you than by going all the way through the foreclosure process,” Nicholas said.
You want to show the lender that they will recover more money by renegotiating with you than they would if you were to foreclose on your loan.

Here are some guidelines When negotiating a loan modification with your mortgage lender:

1. Deal only with your lender’s loss mitigation and/or work out department.

2. Write a hardship letter demonstrating the reasons.  This may be job loss, a hike in an adjustable rate, a serious medical condition or a  balloon payment coming due.  Whatever the reason demonstrate that these circumstances make it impossible for you to continue making your mortgage payments as scheduled.

3. Send the lender your financial statements, employment records, tax returns and bank statements to prove that you would be able to afford the modified loan terms.

4. Send the lender a current appraisal of your home or recent comparable sales in your neighborhood demonstrating the current value of your home. You can contact any Realtor  to supply you with a CMA.

For more information, visit www.CMPSInstitute.org or call 888.608.9800.
The CMPS Institute has posted a sample letter that you can use during your renegotiation:

http://www.cmpsinstitute.org/pdf/SampleLoanModificationRequest.pdf
You may want to consult with an attorney if the lender refuses to work with you.

*Flyers and brochures are sent to all the agents and to current buyers.

*I make high quality virtual tours to showcase your property

List your home with

RAIN SILVERHAWK

rain@sandpointrealty.com

Each time your credit report is pulled, it is run through a computer program with a built-in scorecard. Points are awarded or deducted based on certain items such as how long you have had credit cards, whether you make your payments on time, if your credit balances are near maximum, and assorted other variables. When the credit report prints in your lender’s office, the total score is displayed. Your score can be anywhere between the high 300’s and the low 800’s.

Lenders wanted to determine if there was any relationship between these credit scores and whether borrowers made their payments on time, so they did a study. The study showed that borrowers with scores above 680 almost always made their payments on time. Borrowers with scores below 600 seemed fairly certain to develop problems.

As a result, credit scoring became a more important factor in approving mortgage loans. Credit scores also made it easier to develop artificial intelligence computer programs that could make a “yes” decision for loans that should obviously be approved. Nowadays, a computer and not a person may have actually approved your mortgage.

In short, lower credit scores require a more thorough review than higher scores. Often, mortgage lenders will not even consider a score below 600.

Some of the things that affect your FICO score are:

Delinquencies
Too many accounts opened within the last twelve months
Short credit history
Balances on revolving credit are near the maximum limits
Public records, such as tax liens, judgments, or bankruptcies
No recent credit card balances
Too many recent credit inquiries
Too few revolving accounts

 In order to get the highest price in the shortest time, you need to know how to market your home.

The most important factor of marketing your home is pricing it right. A well priced home is a sold home.  Your price should be adjusted to reflect the market, and the property’s worth. A house is only worth what someone will pay for it.  The key is to get lots of people checking out your property at a fair price instead of having no buyers because your price is set too high.Another important factor is the condition of your home. Make sure that your home looks ready to be sold. Fix any defects (peeling or faded paint, cracks, stains, etc.) Condition alone can sometimes prompt fast buying decisions. Consider upgrading your home by making major repairs and cosmetic improvements before selling.  

Some of the biggest life altering events we have in our lives is to buy or sell a home. The last time I sold my house I thought my family would divorce me. I stressed over every little thing. I removed the personal touches and staged the house so that it was picture perfect. We shampooed the carpets almost everyday, made everyone smoke outside, and cleaned everything 20 times a day. We fixed every little thing and landscaped the back yard, it was almost a shame to move after all the work. We jumped when the phone rang, and was hopefull when a car went by real slow. It all paid off, and our house sold in 33 days. One of the main differences in this time than any of the other houses I sold was that I had a really good real estate agent.  

What makes a good Realtor?  The first thing in my book is to get an agent actively promotes my house and that stays in contact. I want to know the bad news as much as the good. Like most people I can handle anything as long as I know what is going on. There is nothing worse than listing your house with an agent and then not hearing from them until 6 months later when it is time to relist. A good Realtor will drop you an email or give you a call once a week. You also want a realtor that is not only well versed in the local market but also one that internet savvy. 90% of today’s home sales originate on the net. Find an agent that has a good handle on how to use the internet to market your home. When selling your home, one of the most important services your real estate agent can perform is to help you set the listing price. Most people approach a sale thinking they have a pretty good idea of what their home should sell for. But until you do some calculations based on current market trends, what other similar homes have recently sold for, and sale prices in your area, there is no way you can possibly know what price to set. In the Sandpoint, Idaho area we had a market boom in 2005. Every home that hit the market was snapped up instantly and for a price well exceeding what it was worth a couple months before. Now 2 years later prices are back down, but I guarantee that everyone selling their home today remembers when their neighbor for $20,000 more for his house 2 years ago. Something is only worth what someone else is willing to pay for it. Stay away from agents who promise an unrealistically high price The market dictates your listing price. Any experienced real estate professional will tell you that listing your home at an unrealistically high price is not a good way to sell your home. Some people feel that it gives them bargaining room, or that they might just find someone to buy it. What really happens though is that the over priced home hits the market and agents will dismiss it as being too high priced. If you should get someone to make an offer at the high price, chances are it will fall through when the appraisal comes in at a lower price. Some agents use a high listing price as a ploy to get you to list with them. After a few weeks of getting very little traffic at the high price this agent will come back to you and suggest you lower the price in order to generate traffic. Unfortunately, you’ve lost what is usually the most critical time period in selling a home - the first few weeks immediately after it is listed. A well priced listing is a sold listing.

Find an agent who has your best interest at heart. You don’t want an agent that will just tell you what they think you want to hear, you want one that will tell you the truth. A good agent will tell you all the things that will hinder you chances of selling, so that they can be corrected. The day you list your house is the day you are serious about leaving that house. Find an agent that really wants to help you sell your house not just take the listing. Find an agent in which you feel comfortable with, after all this is a big event in your life.

If you are in North Idaho and want to sell your home or property, please call Rain Silverhawk at (208)610-0011

The price is the first thing buyers and agents notice about your property.  You want your house to be taken seriously, and the asking price reflects how serious you are about selling your home.

Always be realistic. And understand and set your price to reflect the current market situation.

When reading an offer, keep in mind that you are out to get the best price AND the best terms for you. If you focus solely on the price, you may overlook terms that could be favorable to you.

*the buyer will pay for most or all of the closing costs

*higher-than-market-interest on a carry back loan
*the buyer will take care of any repairs
*quick close - the buyer is pre-approved and ready to close in a time that best suits you
*all-cash deal

When reading through offers, remember to look at the whole package. Take the time that you need to assess what is being offered and if it meets your needs.

For those of you thinking about home buying with pets, one of your first considerations is whether your pet will be welcomed where you plan to buy.

Especially if you’re considering a condo or townhome that is governed by a homeowner’s association. One reader says she puts a clause in her purchase contracts making the purchase contingent on receiving written permission for her pets from the association. Because sometimes the guidelines can be vague, and you don’t want to end up selling right after you bought because your pet is prohibited from living with you.

When I lived on a large R-2 lot in the Newport Heights neighborhood of Costa Mesa, CA, I accidentally ended up with a farm. It started with a goat — because I didn’t have time to walk a dog. Goats make excellent pets, in case you are wondering. A little old lady once stopped me in the park where I walked my Nubian goat to gush, “What a lovely Doberman.” Every time I went to the Feed Barn to buy alfalfa, I’d spot another pet, er, animal. By the time Animal Control came out, I had, in addition to the goat, an Angora rabbit, two turkeys, 12 baby Mallard ducklings and their parents, two Peking ducks, a big white duck named Donald and the troublemakers, the geese. Those were just the pets who lived outside.

I had to find them all new homes, a place where they wouldn’t end up as dinner after being my pets for two years. It broke my heart.

Our pets are dependents. They rely on us to care for them and provide a warm, loving environment. Getting approval for your pets is only the first step, there are many more considerations when pet lovers buy a home . . . read more about home buying with pets.

From Elizabeth Weintraub,

Hot Market -

In a cold market, houses may be listed for long periods of time and the prices of houses listed may drop considerably. This market is advantageous to the buyer. Even though this market is a great time for buyers, you do not want to lose your dream home by being unrealistic.