Real Estate Information

If you decide to purchase a home by December 1, 2009, you will be entitled to an $8,000 tax credit. This amendment to the economic stimulus bill will be available to if you purchase your first home between 1/1/2009 and 12/1/2009. Home buyers will be entitled to claim a total tax credit of $8,000 or 10% of the purchase price, whichever is less.  To avoid possible abuse of this credit, it is only allowed for your primary residence and will only have to be re-paid if said house is sold within two years of purchase. Keep in mind that you must close on or before December 1, 2009 to be eligible for the credit. Most closings take about sixty days, so with that in mind you must go under contract by October 2nd, 2009 - this gives you seventy-three days from today to find your first home. If you manage to meet these deadlines, all you have to do to claim your credit is fill out I.R.S. Form 5405.

For more information about this credit go to the IRS website.

If you currently are in a situation where you must sell your home and you owe more on your home than what it is worth to sell, a short sale can be a very good solution to your problem. Many myths have evolved over time, but understanding the reality is a way to help yourself. Seven short sale myths are:

1. Short sales are impossible and never get approved. It is true that short sales are more difficult but they are not impossible. A Certified Distressed Property Expert has extensive training to help homeowners in distress.
2. Banks Don’t Accept Short Sales. In reality, banks are doing whatever they can to avoid a foreclosure.
3. You must be behind on your mortgage to negotiate a short sale. Many lenders today focus on verifiable hardship, monthly cash flow shortfall and insolvency - not just people in default.
4. Buyers Avoid Short Sales. Many agents report that buyers call them looking for short sales. Short sales are becoming synonymous with a “good deal”, specifically with international buyers.
5. Listing your home as a short sale is embarrassing. Recent estimates state that 1 out of 5 homeowners in the U.S. is in this situation. You are not alone!
6. Banks prefer to foreclose. Banks do NOT want to foreclose. Banks, investors and the federal government have all publicly stated that if a person qualifies for a short sale, then the deal needs to be considered.
7. There is not enough time to negotiate a short sale before my foreclosure. Many lenders today will stall a foreclosure up to the final day of the process, with a legitimate contract.

For more information about short sales go to About website.

 Today in the United States there are more and more homeowners facing the devastating financial challenge of foreclosure. Many times it can be avoided. Here are a few options besides foreclosure, along with a short explanation of each.

1. Reinstatement: This option is extremely simple, but the most difficult. The homeowner asks the mortgage company the total amount owed and pays it all, including fines and fees. It does not require approval, and lenders will allow this up to the day before the final foreclosure sale.
2. Forbearance or Repayment plan: This is when a homeowner negotiates repaying their back payments over a period of time. Usually, the homeowner makes their current payment as well as a portion of the back payments owed. Most lenders require homeowners to be qualified for this option.
3. Mortgage Modification: This plan is when either the interest rate of the loan, the principal balance or the term of the loan is reduced. The result is generally a lower, more affordable payment for the homeowner. Homeowners need to qualify for this option and must supply all necessary documentation, while the lender has to be actively pursuing modifications.

For more information on ways to avoid foreclosure go to the HUD website.

There is so much misinformation out there these days about Short Sales. While this transaction may be a somewhat complicated process, here are the three very uncomplicated things lenders are looking for to see if you qualify:

1. Financial Hardship: This is defined as a verifiable reason that has or will cause you to miss a payment, such as a mortgage payment adjustment, a job loss, too much debt or a business failure.
2. Monthly Shortfall: Lenders want to see that you cannot afford to pay your mortgage. You will be required to provide your agent a financial worksheet that demonstrates this. The shortfall equation is simple: Total Monthly Income - Total Monthly Expense = Monthly Shortfall.
3. Insolvency: You must be able to prove to the lender that you owe more than you have in cash. Insolvency can be proven in many cases, even though you may still have some money for living expenses.

For more information about the Short sale process go to Homebuying.com.

Statistics show that around 5% of reported identity theft case victims are children. The reason your child is a target is because the crime will very likely go undetected for years. Most do not realize it until they are in college and apply for their first credit card, and find then that they have been victimized. Take heart, there are many ways to avoid becoming a victim of identity theft. Here are some of them:

• Create a list of every credit card number and bank card that you keep in your wallet.
• Never keep your social security card or any information with your social security number on it in your wallet.
• Never give out any private information on your e-mail.
• Cease all bank and credit card mailings.
• Always reconcile your bank statements and go over your credit card statements. Some thieves start small, to find out who pays attention.
• Keep your car registration and car insurance together in a closed envelope, hidden away in your car. Be sure to always lock your car.
• Try never to use a public computer for business use or to make a purchase.
• Memorize your ATM pin, and make sure no one is standing nearby when you use your ATM card.
• Never save financial information on your cell phone.
• Never apply for a job on-line, unless the employer has a verifiable address.

If you are a first-time home buyer, before you even look at houses for sale, the most important thing you can do is figure out exactly how much you can afford on a mortgage payment per month. This will save you wasted time and the disappointment of looking at houses that you may later learn that you simply cannot afford. You first must figure out your debt-to-income ratio. Lenders prefer that you use 36% and under, but you might want to consider using 28% of your gross monthly income for housing expense. Following are the steps to figure out the math:

1. Figure out all of your debt. Multiply your gross monthly income by .36 to find your total allowable monthly debt.
2. Add up all of your fixed monthly expenses.
3. Subtract your fixed monthly expenses from your total allowable monthly debt.

This number is the amount that you have for your mortgage payment, your home owner’s insurance and your property taxes.

For more help figuring out your total allowable monthly debt see a home affordability calculator.

If you are a first-time home buyer, before you even look at houses for sale, the most important thing you can do is figure out exactly how much you can afford on a mortgage payment per month. This will save you wasted time and the disappointment of looking at houses that you may later learn that you simply cannot afford. You first must figure out your debt-to-income ratio. Lenders prefer that you use 36% and under, but you might want to consider using 28% of your gross monthly income for housing expense. Following are the steps to figure out the math:

1. Figure out all of your debt. Multiply your gross monthly income by .36 to find your total allowable monthly debt.
2. Add up all of your fixed monthly expenses.
3. Subtract your fixed monthly expenses from your total allowable monthly debt.

This number is the amount that you have for your mortgage payment, your home owner’s insurance and your property taxes.

For more help figuring out your total allowable monthly debt see a home affordability calculator.

Identity theft has become a very serious problem in the United States. Thieves are not only stealing your personal information for themselves, but many simply sell it on the black market to another thief. They are using this personal information not only to obtain cash and credit cards, but high-cost medical procedures as well. There are a myriad of ways that thieves can steal your private information. Be aware of the following threats:

• Phishing: This is an e-mail in your Inbox that claims to be from either your bank, Paypal or Ebay, or other online service. They then ask you to click on a link and enter your personal information.
• Spoofing and Pharming: Thieves can actually redirect legitimate website traffic to an imposter site, where they will ask you to enter your personal information.
• Spyware: It is very common for people to mistakenly download illicit software and find themselves accidentally clicking on a pop-up. This opens the door for thieves to steal your credit card numbers and passwords by accessing information on your hard drive.
• Vishing: This is “voice phishing”, which is when a thief sends you a phone message asking you to key in your personal information.
• Bank card skimming: Thieves actually add a fake ATM slot and camera to a legitimate cash machine so they can copy your account information. Servers at restaurants can also be armed with a portable card reader.
• Thieves try to steal your wallet and can also go through your garbage for personal information.

Although mortgage rates are still above the record lows, 30-year fixed mortgage rates are decreasing. These rates do vary state by state. Fifteen-year fixed mortgage rates fell as well this week, as did 5-1 adjustable rate mortgages. Georgia’s thirty-year mortgage rates were the lowest, at 5.32%. At this time last year the average rate for a thirty-year fixed was 6.37%. The average rate this week was 5.2% - not quite as low as the record low of 4.78% from early spring. Rates rose this past June due to the yields on long-term government debt climbing; investors became concerned that large amounts of extra government debt would trigger inflation. Experts speculate that mortgage rates fell this past week from market concern due to the weakening labor market. Keep in mind that the above rates do not include the add on fees called “points”. The average nationwide fee for a 30-year fixed rate mortgage and 15-year fixed rate mortgage averaged 0.7 of a point, while 5-1 adjustable rate mortgages averaged 0.6 of a point.

For more information on mortgage rates go to Zillow.

If you have fallen into the category of a second-home owner who is having financial difficulty and trouble selling it, there are things that you can do to try and save money.

• Wait for rates to come down again and re-finance the loan.
• Hold off on any planned home improvements.
• Rent the property. You may rent your property for up to fourteen days before having to report the income to the I.R.S. This is a wonderful option if your property is near a popular annual event that brings in many out-of-towners needing places to stay for the event.
• Donate the home to charity. You can donate a week for a charity auction and then possibly deduct the fair market rental value from your income taxes. A home can be donated as a Life Estate, which gives the homeowner the right to live there until death and provides a large tax deduction.
• If you are ambitious you could hire a tax attorney and appeal your property taxes. Many property taxes were assessed on values at the peak of the market, and are now valued much lower.
• Write up a written agreement or family limited partnership to share the financial burden of the second home with a “partner”. This could be a family member, or not.