Appleton Wisconsin Mortgage & Real Estate Resources: November 2009

Did you know that there are over 400,000 veterans living in Wisconsin? Serving our Vets, Active Military Personnel and their families is so fulfilling. Below are some really cool features about a VA Loan....  If you are not working with and helping our Vets and Active Service Personnel living right here in Wisconsin, you are missing out on a great opportunity to give back.

So What's So Cool About A VA Loan?

• Zero Down payment - Still no changes to this guideline
• No PMI - EVER!
• Credit Score Minimum - Still 620 for Federal VA Loans
• No VA Funding Fee (if Veteran is VA disabled).
• Veteran can use a VA Loan to purchase a Multi-Family property (must live in one of the units)
• Veterans can qualify even if they are in a Chapter 13 (verify on-time re-payments for 12 months)
• Loan amounts up to $417,000
• Simple Dimple Low, Low Cost Refinancing

Being an expert in Federal and Wisconsin State VA Loans is just one very small thing I can do to honor our service men and women. They are entitled to the benefits and I am so very pleased to have the opportunity to serve them in this aspect.

Let's work together and pay it forward.

Here are the Wisconsin Statistics - Look how many we can serve and support:

Bob Edwards, a respected Appleton, WI Realtor has provided a great article on Taking the Stress Out of Home Buying - Thanks for the post Bob.

The U.S. Military, Armed Service, Intelligence Service and Foreign Service personnel received a bonus when the extension of the home buyers' tax credit was signed into law.  The bonus is designed to benefit U.S. Military personnel on active duty and out of the U.S. for 90 days during any part of 2009. The enchantment will provide our Military personnel an additional year to buy their homes - their deadline is May 1, 2011. 

The bonus provides another huge benefit, which is a waiver on the time of occupancy. Most home-buyers using the tax credit must use the home purchased as a principal residence for a period of at least three years or forfeit the entire credit. U. S. Military, Intelligence and Foreign Service Personnel will not be required to repay the credit should they find themselves selling their home as the result of new orders that require the relocation as the result of official military business. 

Here is snapshot of the rules:

• A "first time home buyer" is defined as someone who has not owned a primary home in the last three years. If you are a "first-time home buyer", your tax credit will amount to 10% of the purchase price of your new home not to exceed $8,000.
  
• A "long-time resident" is defined as someone who has lived in the same primary home for 5 out of the past 8 years. If you are a "long-time resident", your tax credit will amount to 10% of the purchase price of your new home not to exceed $6,500.
  
• The tax credit does not need to be paid back if you continue living in the home as your primary residence for three years without selling it. If you sell the home in connection with government orders for official service, the credit does not need to be repaid even if you sell your home within the three year time frame.
  
• The home must be purchased for less than $800,000 before May 1, 2010. If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010. If you have served for at least 90 days of the year outside of the United States, you have until May 1, 2011 to purchase your home and receive the tax credit. In that case, if you sign a binding contract to purchase a home before May 1, 2011, you would need to close on the transaction before July 1, 2011.
  
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
  
• You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendant (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces, and others.
  
• If you are married, both spousesmust qualify for the credit.
  
• If more than one unmarried individual is buying the property, the credit can be split up among all the individuals who qualify. However, the total credit taken cannot exceed $8,000 (or $6,500 for "long-time residents"). Alternatively, if only one of the unmarried buyers qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit.
  
• The credit applies even if you have co-signers on your mortgage loan.
  
• The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence - you could live in one unit and rent out the others.

How does the tax credit work?

A tax credit is similar to a gift certificate that you can use to pay your taxes - it reduces your income tax bill on a dollar for dollar basis. Imagine paying your bill at IRS Restaurant, and then later getting an IRS Restaurant gift certificate. Normally, you would need to go back to IRS Restaurant and buy more food in order to use your new gift certificate. But what if IRS Restaurant allowed you to just turn in your gift certificate for cash? That's how the home buyer tax credit works! All you need to do is file a form with the IRS after you buy your new home and they will send you a refund check for $8,000 (or $6,500) - just like the example of IRS Restaurant that allows you to exchange your gift certificate for cash! Remember though, you'll receive the $8,000 (or $6,500) from the IRS AFTER you purchase your new home, so you cannot use the funds to help with your down payment.

To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another person any transaction or matter addressed in this communication. I recommend that you consult with properly licensed legal, tax and investment adviser for specific details pertaining to your individual situation.

I hope you have found this information beneficial. If you would like more information about the home buyer tax credit or other recent updates to the mortgage and real estate markets, please feel free to give me a call, or simply shoot me an email. I am a VA Loan Specialists and am honored to help with the purchase of your new home!

Now is the perfect time to buy a home; there's a huge inventory of properties priced at levels not seen since 2004.  Not to mention the extension of the first time home buyers tax credit (of up to $8,000), and the NEW repeat Buyers credit (up to $6,500). 

For detailed information and answers to frequently asked questions check out this story: Hot Off The Press - Answers to Questions on the New and Expanded Tax Credit

It is important NOT to shoot from the hip and fire before you aim at your target..... get all the facts prior to entering into the market. Consult your local Real Estate Professional for specifics in your area. The burning question for many in the market for a great deal is - Can you ever really be confident you're getting a bargain?

Most homes sold within 3% of asking prices, but a good many sold for more than 10% below asking prices.  How can you get a bargain on your dream home?

Here are five tips for getting a sweet deal:

1 - Find listings on the market for 90 days or more: Smart buyers have long known that if a home doesn't sell in three months, the listing becomes stale.  The more deeply discounted homes were 83% more likely to have been listed 90 days or more.

2 - Bid low on a fixer-upper:  Bargain sales were 73% more likely to have used "fixer-upper" or similar terms in listings and ads. People who sell homes before fixing them up are usually more concerned about an easy sale than the best price.  That jives with a 2003 study by the National Association of Realtors, which found that, on average, fixer-uppers sell for 24% less than other homes.

Many discounted homes have sustained not just one or two but several price reductions: Heavily discounted homes are 28% more likely to have already been price-reduced.  56% of the biggest bargain homes, prices had been dropped at least twice before buyers made a bid. Once a seller lowers his asking price, he sends a signal to buyers that he is willing to accept further discounts in negotiations.

3 - Look for desperate flippers - Money for investors is becoming more difficult to come by, and many investors have purchased properties to flip on high interest rate and short term loans. Look for homes where the seller has been a resident for less than 5 years. Many of these people are willing to sell at a lower price.

4 - Skip remodeled properties - Newly remodeled homes still expect top dollar.

One more crucial tip!

5 - An expensive mortgage can easily wipe out any savings you achieve in price negotiations, so research scrupulously here, too.  Make sure you consult and explore your options with a local mortgage professional that will provide you with a mortgage plan specific to your needs. There are different products available to you, so be sure to ask your expert about the various options available to you.

Happy House Hunting! We are Certified Mortgage Planning Specialists and are happy to assist you with your questions and provide you with options. We are connected to the local Real Estate Market and would love to provide you a referral to a local Real Estate Professional.

Listen Up!  Now That The Ink Is Dry on the New and Expanded Tax Credit - Home Sellers and Buyers Prepare Yourselves For A New Wave of Action . . . .

Are you still in the fence about buying a new home, or selling your current home to move into that dream? Well, as can see by the passage of the new and improved home-buying bill; Congress wants to push you into the market with an expanded home buyer tax credit.

They sweetened the pie by expanding the program as follows; under the expanded program, homeowners no longer have to be first-time buyers and are now eligible for a tax credit of up to $6,500 if they purchase a new home. To qualify, current owners will need to have lived in their prior residence for five consecutive years out of the past eight years. Here is the all important detail . . . The credit would apply to home purchases under contract by April 30, 2010, as long as they close by June 30, 2010.

First-time buyers (and those who haven't owned a home in the last three years) will continue to be eligible for up to $8,000, with the same deadlines mentioned above.

As for income limits, the new credit would be available to individuals earning up to $125,000 or couples earning $250,000. That's up from $75,000 and $150,000, respectively, for the current tax credit. The credit can only be used on homes that cost $800,000 or less, and cannot be applied to vacation or second homes.

Here's what you need to know about the Extended and Expanded Home Buying Tax Credit:

Attention Sellers: More Buyers Expected -The new tax credit - coupled with low mortgage rates and the supply of affordability priced homes on the market - may give many people who had been a bit reluctant of buying that extra nudge to step into the market. And in contrast to the first-time home buyer credit, the new $6,500 credit is available to a larger part of the population, with higher incomes. Now that is great news for many.

Plan Out Your Timing Now - The legislation allows buyers to claim the credit if the home purchase is under contract by the end of April 2010, and closes by the end of June 2010. This may seem like a long time, but not in the world of home buying - New regulations and tougher qualifying criteria is causing delays not experienced in months and years past.  In order to meet this deadline, consider from now until March your window to buy a house. Keep in mind that once you have an accepted offer, the closing process can take a while and can also be delayed for any number of reasons.

The Slow Months Won't Be As Slow -The renewed tax credit is obviously good news for buyers, and it is even better for sellers, especially Wisconsin sellers.  As we all know, the real estate market is headed into what is traditionally the slowest months for real estate sales; Specifically here in Wisconsin, where the only thing that seems to move with urgency when the snow fly's, are the snow plows! It is often the case that sellers are advised that a home on the market between the months of October and April will probably get the least attention from buyers and attract lower offers than in busier periods. The credit is sure to renew interest in the market during the next 6 months -- and compel sellers to take advantage of an influx of buyers.

Already in a Deal? Check Your Status - Buyers who are smack in the middle of a transaction now or have already accepted a contract should pause and figure out if they can take advantage of the credit. The first thing they should do is call their real estate agent or mortgage broker to find out if this money would be available to them and how they can apply.

Happy buying and Selling - If you need any assistance, or have any questions, we are here to help in any way we can.

The NAHB, National Association of Home Builders has put together the most comprehensive site and is sure to provide answers to may questions you may have. Please visit the links below -

Tax Credits At A Glance -

FAQ - First Time Home Buyers -

FAQ - Repeat Home Buyers -

The Government Affairs division of the NAR just released Answers to a few important questions that have come into light as the result of the $8,000 tax extension and the expansion to of a $6,500 credit to buyers who are NOT qualified as first time home buyers. I was also able to find a few more great answers from Robert Dietz, economist for the National Association of Home Builders.

We feel it is important to provide this valuable information in a timely manner. Please keep in mind that the bill is scheduled to be signed into law today and the fact are unfolding as I post this imformation......

 Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit

Question: "When does the program start? I already signed a contract, it closes in December & have owned our house for 11 yrs.... Do we qualify for the $6,500 credit?" 

Answer: You qualify, says Robert Dietz, economist for the National Association of Home Builders. The bill will become law when the president sigAnswerns it, which was expected to be Nov. 6. In general, Mr. Dietz says, home buyers who close on their house after the bill is signed qualify.

Question: - Existing homeowner credit: Must the new house cost more than the old house?

 Answer:  - No. Thus, for example, individuals who move from a high cost area to a lower cost area  who meet all eligibility requirements will qualify for the $6500 credit.

 Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. IfPresident Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phaseout range).

Question: "My husband and I were transferred from (Texas) to (Indiana) over the summer for his job. We had owned our home in (Texas) for 11 years. We closed on our new (Indiana) home in August 2009. If the tax credit will be retroactive, we qualify in every other way. Anyone know if we will qualify for this tax credit, or if we're going to get taken for $6,500 just because we bought a few months too soon?"

Answer: Unfortunately, the bill has no "grandfather" clause, Mr. Dietz says. "If you're an existing homeowner, and they've closed prior to the date of enactment, when the president signs the legislation, they simply do not qualify."

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.

Question: I am an eligible first-time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

Question: "I sold my first house of 7 years this past July. I am currently building a new house and it is scheduled to be finished in the next few weeks. If I officially close on it in December can I qualify for the $6,500 or did [I] just fall through both cracks?"

Answer: It depends. If you are purchasing the lot from the builder and close after the bill is signed, they should be eligible, Dietz says. If instead the home buyer owns the lot, he or she will have to occupy the building before the bill's sunset date of April 30, 2010.

For a comparison chart provided the NAR - please visit this link:

http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf

The NAHB, National Association of Home Builders has put together the most comprehensive site and is sure to provide answers to may questions you may have. Please visit the links below -

Tax Credits At A Glance -

FAQ - First Time Home Buyers -

FAQ - Repeat Home Buyers -

It will be official soon - Reuters is reporting that the $8,000 Tax Credit extension and expansion of a new $6500 credit for all buyers, has been approved by the House and now heads to President Obama to be signed into law.

On Wednesday, the Senate voted to extend and expand the tax credit to include many buyers who already own homes. Guess what, home buying pie just got a little sweeter, how about $6,500 sweeter! Today it was approved and off to the Oval Office where it is expected to be signed, sealed and delivered!

Here it is in a nut shell - I will continue to provide updated information as it becomes available....

People buying a new or "step-up/down" home and have owned their current homes at least five years would be eligible for tax credits of up to $6,500.

The First-time home buyers; which include anyone who hasn't owned a home in the last three years, can continue to get up to $8,000.

The details indicate that in order to qualify, buyers in both groups mentioned above, will be required to enter into the purchase agreement no later than April 30, 2010. The new law also states that the transaction MUST close on or before June 30.

It has been reported that nearly 1.4 million first-time home buyers have benefited from the tax credit. This number is from August, so the number sure to grow as many pushed to meet the now extended deadline. The NAR (National Association of Realtors) has estimated 350,000 of the buyers would not have purchased their homes without the credit.

I myself have enjoyed helping scores of new buyers over the course of the past several months and look forward to new activity that is sure to pop up as the result of this extension and expansion.

If you are not familiar with the details of the original tax credit, here are a few helpful links.

Top 21 Questions Answered on the $8,000 Tax Credit for 1st Time Home Buyers

Burning Question Answered! Is a Duplex or Multi-Family Dwelling Eligible for the New $8,000 First Time Home Buyer Tax Credit?

I will continue to provide updated information as it becomes available. Happy House Hunting......