MIAMI (Associated Press) – More people were preparing to buy a home in December than in November, according to the National Association of Realtors’ seasonally adjusted index of sales agreements. Agreements rose 1 percent between November and December to a reading of 96.6, a bit lower than the 97.1 level analysts expected. The index has risen nine out of the last ten months.
DALLAS (Dallas Morning News) – Nearly 1,000 first-time homebuyer tax credit filings in Texas have been flagged for possible ill-use of a taxpayer identification number primarily used by illegal immigrants, who are not entitled to the credit.
This number represents nearly one-third of the 3,200 suspicious homebuyer tax credit claims submitted by noncitizens around the country, the total of which are valued at $20.8 million, according to the U.S. Treasury Department.
Russell George, the Treasury inspector general for the tax administration, said that involvement of third-party preparers in some questionable homebuyer claims filed nationwide suggested that there may have been “conspiracies and attempts to cheat the government by more than one person.”
Of the 1.5 million claims made to the Internal Revenue Service for the tax credit, the Justice Department has filed one criminal case and one civil injunction against tax preparers for submitting false claims for the homebuyer credit. One of these cases was from Mission, Texas.
If you intend to pay off your mortgage as quickly as possible, then you’re in the majority; a survey released in 2008 by the Canada Mortgage and Housing Corporation claims that more than 75 per cent of survey respondents who bought a home in the last year said being mortgage-free sooner was their goal.
Of course wanting to be mortgage-free sooner is easier said then done, but there are some tips that can help you along the way to reach your goal quicker.
Fact is, the more you put down the less you’ll have to pay back; not just in the principal but in interest too.
There are two ways to go about doing this; both will save you some money along the way but one more so than the other.
Your first option is to pay twice a month (or whatever frequency works best for you) the total you would normally pay on a monthly payment plan. For example, if your monthly mortgage payment is $1,000 you can opt to make two payments a month of $500 each. You’re not paying any more than you have to each month, although you will save on interest by making part of your monthly total payment early.
Your second option is to pay weekly or bi-weekly payments in lieu of a monthly payment. Why does this save you money? Well, not only will you save money on interest like you would with the first option, but it’s also a way you might not notice that you actually are making a couple of extra payments each year. Let’s say for example, your monthly mortgage payment is $1,000 for a total of $12,000 per year. If instead you decide to pay $500 every two weeks, you’ll actually end up putting $13,000 a year against your mortgage.
Even if you have a closed mortgage, most mortgages allow you to make “extra” payments, once a year, for up to 20% of the mortgage owed. This money is applied to the principal, saving you money in annual interest costs.
If interest rates decrease when it is time to renew your mortgage, consider keeping your payments the same; since less money will go towards paying interest, more will go to paying down the principal.
Look at all your amortization options to see how choosing a 15-year period versus a 20-year period versus a 25-year period will affect your payments and interest costs. Your mortgage payments will be higher, but you’ll pay far less interest over the course of the loan. Do this exercise at the end of each mortgage term as what may have worked for you 5 years ago, might not be the best option for you now.
This article is a guest post from http://www.kanetix.ca
7Published in The Houston Chronicle, Sunday, November 22, 2009
It’s official, President Obama has signed a bill that extends the tax credit for first-time home buyers (FTHBs) into the first half of 2010. In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure opens up opportunities for others who are not buying a home for the first time.
The program gives those who own a residence some additional reasons to move to a new home. This incentive is a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a Primary Residence for 5 consecutive years during the last 8 years.
Deadlines for all contracts need to be in effect no later than April 30, 2010 and close no later than June 20, 2010.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn up to $145,000 can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn up to $245,000 can receive a partial credit. Maximum purchase price: $800,000.
What is a tax credit? A tax credit is a direct reduction in tax liability owed to the IRS.
What is the tax credit for first-time home buyers? An eligible buyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500.
Who is eligible for the tax credit? Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. If either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible. As mentioned, the tax credit has been expanded so existing homeowners who have owned and occupied a primary residence for a period of 5 consecutive years during the last 8 years are eligible for a tax credit of up to $6,500.
How do I claim the credit? For those taking advantages of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405.
Other Restrictions?
If any of these apply, a credit would not be due.
If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.
Breaking News/RISMEDIA, November 6, 2009 – After the Senate gave final approval last night without a dissenting vote, the House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the home buyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow.
The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 tax credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.
For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.
The legislation takes effect December 1 and is not retroactive. Both credits are available only for primary residences, not second homes or investment properties.
WASHINGTON — Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.
The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.
Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.
Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.
Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.
Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.
Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.
Majority Democrats have refused to add the amendments.
If the Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for homebuyers.
Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate.
Lawmakers didn’t release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion.
Industry representatives said uncertainty about the tax credit is hurting new home sales. September’s decline was the first since March.
It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors.
“Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said.
About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.
The tax credit for money-losing businesses is a favorite among Republican lawmakers. Businesses could get tax refunds by using losses from 2008 and 2009 to offset taxable profits made in the previous five years. Under current law, they can only offset profits from the previous two years.
The provision would help a variety of industries, including retailers, manufacturers and home builders, though it’s expensive.
“It’s clearly a way to put cash in the hands of some major economic players,” said Clint Stretch, a tax policy expert at Deloitte Tax.
A similar proposal that was ultimately dropped from the economic stimulus package enacted in February would have cost nearly $20 billion over 10 years. Lawmakers are working to reduce the price tag.
Because people are so strapped for cash, this is a good way to get refunds when businesses need them for operating expenses, said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation.
If you are still confused about the $8,000 Tax Credit then you need to keep reading. The tax credit is still available, but will end on November 30, 2009. That means if you are a first time home buyer and have not found a home and negotiated a contract on it, you need to call me today to get started on your path to home ownership and the best thing your Uncle Sam is ever going to give you. Time is ticking away and you need atleast 30 days from the time of contract exection to the closing date. Not sure if you qualify? If you have never owned a home, you qualify. If you have not owned a principle residence in the last three years, you qualify.
What does the credit actually mean for you? The credit from Uncle Sam is 10% of the home’s purchase price up to $8,000. The only repayment required is if you sell the home within three years of the purchase. Are there any income restrictions? The limit on income is $75,000 for a single person or $150,000 for a married couple. Call me today to get started because time is ticking away and your free money from Uncle Sam will be gone!
This is from an article in the Wall Street Journal and I thought my readers would find it interesting…
First-time home buyers are scurrying to qualify for a federal tax credit that expires at the end of November — a trend that has been propping up sales following the worst downturn in decades. Because the closing process can drag on, buyers realistically have just a few weeks left to sign contracts; and they are submitting multiple offers to be certain that one goes through. Although lawmakers have proposed to extend and expand the credit, prospects for such a move are dimming as legislators are urged to show fiscal restraint following mega-bailouts of the financial and automobile sectors. Some housing analysts worry that the credit sparked unneeded supply and that its expiration could drag the market back down.
If you are a first time home buyer you now only have 73 Days until the Tax Credit Ends. You must close on your first home before December 1st to use the $8,000 tax credit. If you need help finding a house and want someone to guide you through your first time home buying experience, call me today. In most cases it’s free to you to use a Realtor because the seller pays all the real estate fees. So why wouldn’t you want representation? Call today for a free no obligation consultation. You could be a first time home buyer by the end of this year and have money in your pocket from Uncle Sam.
Subscribe to our e-mail newsletter to receive updates.
Copyright © 2008-2012 - Register Real Estate Advisors - All Rights Reserved
1614 Louetta Rd. - Spring, TX 77388 - 281.288.3500 or 855.USE.RREA Office - 281.288.3503 Fax
Spring, Texas Real Estate - Shannon Register, Texas Broker
Powered by 