Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income and save nearly $500 per month on their principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.
Showing posts with label Stimulus Plan. Show all posts
Showing posts with label Stimulus Plan. Show all posts
With Affordability Up, Home Buyers Return to the Market
Thanks to record low mortgage rates and declining home prices, 55 million families - or half of all U.S. households - can afford today’s $200,000 median-priced new home, according to figures released by the National Association of Home Builders (NAHB). “That’s an increase of 17 million households from conditions just two years ago and the best housing affordability number we have seen in years,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We are now seeing the first signs that buyers are returning to the marketplace.”
Eligibility Requirements And Getting Started With The Making Home Affordable Program
The Making Home Affordable program is officially official. Mortgage lenders are now processing applications and paperwork for the help-the-homeowner plan often referred to as "The Obama Plan".
Because Making Home Affordable is a new program, there have been a lot of questions about how it works, who is eligible, and how to apply for a Making Home Affordable refinance.
What follows is a collection of questions and answers from my clients, the press, plus other things I think you should know.
Of primary importance -- first -- are two points:
- Only Fannie Mae- and Freddie Mac-backed loans are eligible for The Obama Plan
- Fannie Mae and Freddie Mac use different sets of refinancing rules
Be forewarned. In some respects, Fannie Mae and Freddie Mac are like the National League and the American League -- it's the same game, but with different rules. Or, maybe a NFL / CFL comparison is more apropos.
First-Time Home Buyer? Choose When to Claim Your Tax Credit | RISMedia
RISMEDIA, April 4, 2009-With the deadline for filing federal tax returns fast approaching, the National Association of Home Builders (NAHB) has made information available for qualified home buyers about how and when to claim the $8,000 first-time home buyer tax credit.
The basic eligibility requirements for the credit are: the home must have been purchased on or after Jan. 1 and before Dec. 1, 2009; the buyer may not have owned a home in the three years prior to the purchase; and the buyer must have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers.
Two factors affect the amount of credit qualified buyers can claim: it can only be equal to 10% of the purchase price of the home, up to a maximum of $8,000; and it is reduced for buyers with a MAGI between $75,000 for single taxpayers ($150,000 for married filers) and the upper income limit.
Is California real estate coming back?
No state has been harder hit by the housing bust than California.
It has piled up more foreclosures and has endured among the worst home-price declines. The median price of a single-family home sold in February was $247,590, down 41% from 12 months earlier, according to the California Association of Realtors (CAR).
And home construction in the Golden State has nearly vanished: December housing permits shrank to about a quarter of what they were during the boom years, according to the National Association of Homebuilders.
5 Recommendations for Navigating Today’s Mortgage and Housing Markets
”There are five distinct strategies that can help home owners, buyers, and sellers successfully navigate today’s turbulent mortgage and housing markets,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.
1. Understand and Utilize the New Tax Credits. Many home owners are not aware that the latest government stimulus package gives them a special tax credit of up to $1,500 for making certain home improvements. Also, if you are buying a primary home and you have not owned a primary residence in the last 3 years, you may qualify for the new $8,000 first-time-homebuyer tax credit. “Although you can’t use the credit to help with your down payment, the credit can be claimed on your 2008 tax returns if you buy the home in 2009,” Nicholas said. “This means that even if you buy the home after you file your taxes on April 15, you can simply file an amended 2008 tax return and the IRS will send you a refund check for $8,000.”
Mortgage Rates 'as Low as 2 percent'
Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.
Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.
A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.
Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.
The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.
Pending home sales rise 2.1 percent in February from January
An index that tracks signed contracts to purchase previously occupied homes rose in February from a record low a month earlier as buyers took advantage of deeply discounted prices and low interest rates.
The National Association of Realtors said today said its seasonally adjusted index of pending sales for previously occupied homes rose 2.1 percent — in line with expectations — to 82.1 in February from January's record low of 80.4.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.
Because of falling home prices and mortgage rates, homeownership is more affordable than it's been since at least 1970, the trade group said.
Bidding Wars Over a House? Real Estate Pros See Bottom
One hour outside of Washington DC, in the picturesque small city of Martinsburg, West Virginia, some homes for sale are attracting bidding wars—again.
“Prices are so low, we’re starting to see that," says Marc Savitt, a realtor there for a quarter of a century. “In our area, you’re at the bottom.”
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Allan Ferguson California Suburbs |
Savitt, who’s also president of the National Association Of Mortgage Brokers, might be accused of being overly optimistic. But he is hardly alone in sensing a long-awaited bottom in the real estate market.
For most at this point, it’s less a matter of bold confidence that cautious optimism, but data are emerging to make a reasonable case.
Three categories of home sales—new, existing and pending – all posted surprise gains in February, along with housing starts are posted surprise gains in February.
How to Buy After Bankruptcy or Foreclosure
Put your fears aside. Just because you have bad credit, filed bankruptcy or gone through a foreclosure does not mean you cannot buy a home. You most certainly can buy a home with bad credit. But you're going to pay more than a borrower who has sparkling credit.
The Waiting Period After Foreclosure / Bankruptcy
- The period between bankruptcy filings is seven years, but the ding to your credit report stays for 10 years.
- For better rates with a conforming loan, the wait is four years after filing bankruptcy.
- FHA guidelines are two years after a foreclosure, which means you could qualify for as little as 3.5% down.
- Hard-money lenders will often make loans six months after filing bankruptcy or a foreclosure, but will a require 20 to 35% down payment. The interest rate will be very high and the loan terms are not as favorable; many will contain prepayment penalties and be adjustable.
- Subprime lenders (not to be confused with hard-money lenders) are no longer making 100% financed loans.
78% of First-time Home Buyers Say Now Is Good Time to Buy
Century 21 Real Estate LLC, the franchisor of one of the world’s largest residential real estate sales organizations, announced the results of its recently commissioned first-time home buyer survey. The survey found that more than three-quarters (78%) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy. Out of the 1,000 prospective U.S. first-time home buyers surveyed for the CENTURY 21 First-Time Home Buyer Survey, 68% think now is a better time to buy than six months ago. Prices are the driving motivation for potential first-time home buyers with more than eight out of ten first-time home buyers (85%) saying they consider current home prices affordable and 73% citing that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between “being willing to consider an offer now” (42%) and “waiting for prices to go down before they seriously consider making a purchase” (48%).
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Survey: Households Say Now Good Time to Buy
More than three-quarters (78 percent) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy.
Out of the 1,000 prospective U.S. first-time home buyers surveyed in early March for the CENTURY 21 First-Time Home Buyer Survey, 68 percent think now is a better time to buy than six months ago.
Prices are the driving motivation for potential first-time home buyers with more than eight of ten first-time home buyers (85 percent) saying they consider current home prices affordable and 73 percent citing that taking advantage of current prices is a major factor in their decision to buy.
More
Out of the 1,000 prospective U.S. first-time home buyers surveyed in early March for the CENTURY 21 First-Time Home Buyer Survey, 68 percent think now is a better time to buy than six months ago.
Prices are the driving motivation for potential first-time home buyers with more than eight of ten first-time home buyers (85 percent) saying they consider current home prices affordable and 73 percent citing that taking advantage of current prices is a major factor in their decision to buy.
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New rescue effort called key to resuming lending
Financial markets roared ahead Monday as investors reacted with near-euphoria to the Obama administration's new trillion-dollar plan to stabilize banks by relieving them of their troubled assets and risky loans.
But even as markets exulted, conflicting interests among participants in the program — banks, investors and taxpayers — were emerging, leaving in doubt the fate of a program meant to revive bank lending and in turn reinvigorate the overall economy.
Some banks are resisting government pressure to sell assets at prices they believe to be too low. And despite the risk of an outcry from Congress, the Treasury this weekend made the program more attractive to private investors, according to industry and some government officials. Treasury officials said the last-minute changes were not intended to sweeten the deal.
Obama administration getting ready to buy a trillion dollars worth of bad bank loans
WASHINGTON Struggling to contain the worst financial crisis in seven decades, the Obama administration wants to buy billions of dollars of toxic assets from banks to ease borrowing for consumers and businesses.
Some industry officials familiar with the details said Saturday they expected the approach would try to remove as much as $1 trillion from banks' books. An announcement from Treasury Secretary Timothy Geithner could come as early as Monday.
If banks are not burdened by the soured loans, then they would be in better shape to resume more normal lending.
According to administration and industry officials, the plan would rely on the Federal Reserve and the Federal Deposit Insurance Corp. to supplement the government's $700 billion bailout fund. The uproar over the millions of dollars in bonuses for employees at troubled insurance giant American International Group Inc. has dimmed prospects for getting more bailout money from Congress.
The officials, who spoke on condition of anonymity because the details have not been announced, said Geithner's plan will have three major parts:
The Pros and Cons of Easing Access to Credit
Over the past few weeks, President Obama has unveiled multiple plans for aid to small businesses, including lowering loan fees, increasing guarantees on government-backed loans, and buying up to $15 billion in Small Business Administration-backed loans. But will the new programs unfreeze credit as they are intended to do? And how can entrepreneurs take advantage of the warmer climate if they do?
Sanford Ehrlich, executive director of San Diego State University's Entrepreneurial Management Center, says the lending initiatives are likely to provide some relief, but he worries it won't be enough to help companies that are really struggling.
"Anything that will increase lending will be good for small business, but you have to be a fairly liquid small business to take advantage of this program. If you have too much inventory, too little cash flow, you're currently carrying debt that's been called, or balloon payments are staring you in the face, adding more debt to your current situation isn't going to help," Ehrlich says. "So many small businesses are in serious trouble that the number this will help will be limited."
First-time home buyers moved by tax credit
The first-time home-buyer tax credit may be motivating some to take action and buy a home this spring, according to ZipRealty survey results released this week. Sixty-two percent of first-time buyers said that the $8,000 tax credit is giving them an incentive to buy in 2009.
Of those who weren't motivated by the credit, 29% think it's not enough money to make a difference, 28% didn't think they would qualify and 24% think home prices will continue to decline.
But perhaps not enough is being done to promote the perk, according to some in the home-building industry. In a recent article on "Nation's Building News," a publication of the National Association of Home Builders, one industry executive suggested just that.
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The 2009 First-Time Homebuyer Tax Credit -- Everything You Absolutely MUST Know About IRS Form 5405
As part of the American Recovery and Reinvestment Act of 2009, Congress authorized a first-time homebuyer tax credit of up to $8,000. The $8,000 credit replaces the $7,500 tax rebate program that was included in last year's stimulus.
Modifying Your Loan Under the Home Affordable Modification Plan
If you can’t qualify to refinance under President Obama’s Making Home Affordable plan (the details were released today; see more info on the Obama refinance plan), you might still have a chance to lower your monthly payments by doing a loan modification. This portion of the plan is aimed at people who are — or who soon will be – having a tough time paying their mortgage, but who would be able to afford their home if the interest rate on their mortgage was lowered.
Who qualifies?
Obama plan aims to help 'responsible' homeowners
The Obama administration's plan for a housing rescue aids two groups of homeowners largely left out of previous efforts and aims to deny benefits to those who have been unwise or greedy, according to details released Wednesday.
The plan would greatly expand mortgage relief to those who have not missed payments and those whose homes are worth less than their mortgages.
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The plan would greatly expand mortgage relief to those who have not missed payments and those whose homes are worth less than their mortgages.
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Home buyers in California can enjoy up to $18,000 in tax credits
It's getting more rewarding to be a home buyer.
There's the $8,000 federal tax credit for first-time home buyers. And now California has upped the ante, offering a tax credit worth up to $10,000 to any home buyer, first time or not, of any income level, who buys a home between March 1, 2009 and March 1, 2010.
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