Home buyer tax credit extended, plus a whole lot more!!

The House voted yesterday to extend the home buyer tax credit, and expanded the parameters to include existing homeowners in addition to first time home buyers.  The federal tax credit will be extended through April 30, 2010, with an additional 60-day grace period if a binding contract is in place prior to the deadline.  

First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500.   To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years.  

Now even more people will qualify as the bill also increases the qualifying income limits from $75,000 for single tax filers  to $125,000 and $150,000 for joint filers to $225,000!   The purchase price of the home will be capped at $800,000 in both instances.

Get in where you fit in!

New garden saving money

My automatic sprinklers use to water my lawn @11pm three times a week for 15 minutes, making my grass so green and pretty.

Last year a new neighbor down the street put in a drought tolerant garden that looked different and interesting.  I was intrigued.  I started asking around and found out that a couple of friends were already on their way to creating beautiful drought tolerant gardens.  Wow!  This is for me I thought and I immediately killed all my grass.  After the grass was gone I was left with two ugly patches of dirt that became litter boxes for the feral cats in the neighborhood, yuck!  Thank goodness I have two very kind and generous friends who provided the initial cuttings and babies needed to start my garden.  Cactus and succulents I found out are not cheap.   Today my garden is still a work in progress but neighbors and passersby are always commenting on how lovely they think it looks.   Not only has this garden saved me my monthly gardener expense, it has cut my water bill almost in half!!  So even though it never rains in Southern California, and the Los Angeles DWP is enforcing water conservation my garden is coming along just fine.

No advance fees for Loan Modification assistance

On October 11th Governor Schwarzenegger signed a bill that prohibits anyone from demanding or collecting an advance fee from a consumer for loan modification or mortgage loan forbearance services.  All the major banks have the forms and applications needed on their website.  Remember the squeaky wheel gets the oil.  You have to be tenacious when dealing with the bank.  Make sure you follow up once a week to get a status on your case. Make sure to follow up even if they say nothing will happen for 3 weeks.  Call back the next week to make sure your new wait time is 2 weeks.

Buy Real Estate and Wait!

Don’t wait to buy Real Estate, Buy Real Estate and wait!  (Who was the first to say that?)   Although there is competition among buyers for the best deals, it is still a buyers’ market.  Interest rates are below 5% making the deals even better.   Buying a property for cash flow and passive income is the way to go right now!   However, if you don’t own your own home yet, put first things first and get in where you fit in!

Refunds Are So Nice!

Several clients that purchased homes this year, received refunds from the county tax assessor.

Why?

They received a refund because the price they paid for the property was less than the seller paid for it. When you purchase a piece of real estate here in Los Angeles county the escrow will prorate the taxes at the time of the sale based on the sellers property tax amount.  If you paid less for the property than he did then you pay less in property taxes and will receive a partial refund of taxes from the county.

What does it take to get a loan modification?

Who knows what it really takes to get a loan modified?  I know of several situations where attempts are being made to no avail.  Two families were turned down since they were not behind in their payments and their mortgages are not set to adjust this year.  Another couple in the modification pipeline has been waiting for 5 months.  In the meantime their payment has gone up significantly pushing them into a worse situation.

The most horrifying situation is this; while waiting in the modification pipeline a representative told the person there was no need to send in the payment since the amount was going to change anyway.   Consequentially his mortgage went into foreclosure for nonpayment.  The attorney’s office representing the bank reassures him the foreclosure is on hold and no date has been set to sell his home.  He calls the bank weekly but can’t seem to get that modification moving any faster, it’s been 6 months.  What a mess! 

If you are working with a bank on a loan modification, do not stop sending payments to the bank even if someone from the bank tells you to.  Call three times a week to follow up.  Each time write down the date, time and name of the person you spoke to.   Include a letter asking for a status and update with every payment.  Tenacity is what it is going to take to get that loan modified.  

Saving for a house can be fun

With the return of FHA loans, the amount needed for a down payment can be as low as 3.5 percent.  Think of some interesting, different  and fun ways to save and raise extra funds, make it a family activity.  I love the blog, The New York City Change Pot.  I don’t believe they are owners but the entire family locates, retrieves and tallies  free money everywhere they go everyday.  So far this year they have found $148.85!  Its not enough for a down payment, but its one way money can be added to a home down payment fund.  It seems they have made finding lost money a game.

Suggestions for Raising the Money : 10 ways to save or come up with your down payment

1. Keep your eyes peeled for free discarded money on the street, while you are out and about. 

2. Ask your parents, other relatives or friends for assistance.

3. Purge all the junk, collectibles and heirlooms you have that will not accompany you to your new home.  Sell them at a garage sale, on craigslist or eBay. 

4. Withdraw money from your IRA. If you’re a first-time buyer you can pull out $10,000 penalty-free (though you must pay state and federal income tax on it) to put toward your home purchase. If you’re not a first-time buyer, you will have to pay both the 10 percent penalty and income tax on an early withdrawal.

5. Clean out the paid storage unit and sell everything at a yard sale, on craigslist or eBay.   Apply the monthly storage fee saved toward your down payment.

6. Sell some securities, that boat, RV or second car and use the cash toward your down payment.

7. Get a second job. It’ll help you raise cash, and the extra income will help you qualify for the loan. You can quit later.

8. Change the withholding taxes, if permitted, on your salary in anticipation of higher deductions when you get a mortgage. Your take home pay will increase, giving you more funds to put toward a down payment.

9. Refinance your car or other vehicles and add the proceeds to your down payment. 

10. Give up your Starbucks habit for a month.  Make your latte at home and add the money to your down payment fund.

So set your goal and chart your progress.  Post it where you can see it to remind you and encourage you.  Get in where you fit in!

Are you a Lookie Loo?

Do you visit open houses on Sundays just to look?  Everyone is a Lookie Loo before graduating to a real buyer ready to pull the trigger.  Lookie Loo’s love to visit open homes for sport.  Would you like to separate yourself from the Lookie Loo’s and become a real buyer ready to pull the trigger?   A ready buyer is an educated buyer. :)  Get familiar with the Mortgages available and find out how much house you can afford.  There was a pamphlet distributed by the Fannie Mae Foundation several years ago that explains mortgages in simple plain English called, “Choosing the Mortgage that’s Right For You”.  If you would like a copy, send an email with “Choosing the Mortgage that’s Right For You” in the subject line and we will email one to you.  Get in where you fit in!

Mortgage Firms Encouraged to Modify More Loans

The Obama administration is pressing mortgage-servicing companies to step up their efforts to modify troubled loans under its housing-rescue program, the latest sign of frustration with the pace at which mortgage companies are reworking troubled loans.

“We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share,” Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan said in a letter to 25 mortgage-servicing firms.

The letter was sent Thursday to the chief executives of companies that have signed contracts to participate in the government program, which provides financial incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels.

More than 270,000 borrowers have received modification offers under the program. But housing counselors complain many borrowers are waiting for help as mortgage-servicing companies get up to speed. The administration has said its program could help as many as four million homeowners.

The administration has “started to see a significant ramp-up” in modification activity, the letter said. But it added, “there appears to be substantial variation among servicers in performance and borrower experience.” It called on mortgage-servicing companies to beef up staffing and training, and to provide “an escalation path for borrowers dissatisfied with the service they have received.” Freddie Mac, which serves as compliance agent for the program, will be developing a “second look” process in which it will audit a sample of rejected modification applications, the letter said.

The letter also called on mortgage companies to suggest ways the administration can improve the program’s design.

Housing counselors say they have been disappointed by the lack of progress under the administration’s program. “We are not getting anywhere near the level of resolutions we expected,” said Bruce Dorpalen, national director of housing counseling for Acorn Housing Corp., which works with financially troubled borrowers. “The real issue is that generally the servicers are not up to speed.”

Often, housing counselors “must educate the staff of the servicers about their own program,” said Maeve Elise Brown, executive director of Housing and Economic Rights Advocates in Oakland, Calif., which counsels homeowners. “Homeowners on their own are not able to navigate the system.” reported by  Ruth Simon at @wsj.com

Mortgage Rates Drop! 30 year fixed @ 5.14%

Mortgage rates dropped for a third consecutive week, reaching their lowest level since late May, a move that bodes well for the hard-hit U.S. housing market.Average interest rates on 30-year fixed-rate mortgages dropped to 5.14% for the week ended July 16, from the previous week’s 5.20%, according to a survey released on Thursday by home funding company Freddie Mac.

 That is the lowest since the week ended May 28, but significantly higher than the record low of 4.78% set the week ended April 2. Freddie Mac started the Primary Mortgage Market Survey in 1971.

 The drop in rates is a positive for the housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.  Reported by Reuters-NEW YORK

Get in where you fit in!