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Time Is Running Out! Don’t Miss Out On The Tax Credit.
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Where to Begin When Buying a Home
by Brandon Cornett
Beginning a home search can be a somewhat disconcerting task. Perhaps the biggest question many first time homebuyers have is where to begin the process. Some people begin by looking at real estate magazines or websites, while others call real estate agents right off the bat. The process varies.
So, what is the best way to begin your quest for a new home? In truth, any way you begin the process is a good way, because the most important thing is to get started. After all, you will learn a lot as you go. But there are some things to keep in mind:
Do the Proper Research
Buying real estate can be an overwhelming experience for the first-time buyer. But you can make the process much easier simply by understanding it. Start with the lingo. By learning the terminology associated with home buying and mortgage, you will make smarter decisions along the way.
Set Your Budget
The best way to begin looking for a home is to first sit down with a mortgage lender to determine how a high a mortgage you can afford and be approved for. Remember, there is a difference between the loan amount you can be approved for and the amount you can actually afford. So in the end, only you can determine your home buying budget — not a mortgage lender.
When dealing with a mortgage lender you will want to provide him or her with an understanding of what mortgage payment you are comfortable making so they can give you a sense of the size of the mortgage that equates to, based on your credit, income and other factors.
Taking this step first will help “frame” your home search so you are only looking at homes within your budget range. Many first time homebuyers fail to take this step and therefore waste time and energy looking at homes that are well above their budget.
You can find plenty of websites that offer mortgage calculators, and these tools are a good place to start when determining your budget. Just keep in mind that the one variable you can never predict in advance is the interest rate. Only by speaking to a lender can you get a full mortgage quote that includes the interest rate (based on your credit history).
Get Pre-Approved for a Mortgage
Another reason you may wish to start with speaking to a mortgage lender is so you can be prepared to show a pre-approval letter to the seller. This gives them the confidence that you can buy their home, which is especially important for homes where more than one buyer makes an offer (i.e. a seller’s market). Do not confuse pre-qualification with pre-approval. Pre-qual is an informal process in which the lender tells you how much of a mortgage you might qualify for. Pre-approval, on the other hand, is a more formal review of your finances and is likely to reflect the actual loan amount the lenders extends to you. In other words, the person selling the home will pay more attention to the pre-approval letter.
Though there is no wrong way to begin a search for a new home, meeting with a mortgage lender first may be the best way to begin your search and find your dream home. Just remember to always keep an open mind when visiting each property and envision the possibilities. You must also stay realistic about your finances and do your best not to over-extend yourself by purchasing a home beyond your means.
© 2009, Cornett Communications.
About the Author: Brandon Cornett is a consumer advocate and publisher of the Home Buying Institute. You may visit the author’s website at www.HomeBuyingInstitute.com to learn more about this topic.
“Live Where You Work” Program
Cherry Hill and Edgewater Park recently joined a state home ownership program where first-time homeowners can receive low-interest, 30 or 40 year fixed-rate loans and assistance with closing costs and mortgage down payments in exchange for buying a home in the town where they work. The goal of the program is to increase homeownership while easing congestion on the roads.
Under the “Live Where You Work” program, eligible properties include one-family units, condominiums, and 2- to 4-family unit properties that are more than 5 years old and located in a state-designated Smart Growth area. In the Burlington and Camden counties, households of up to two people earning up to $85,600 and larger families earning up to $98,440 qualify to participate. For more information on the ‘Live Where You Work’ program, visit Cherry Hill and Edgewater Park recently joined a state home ownership program where first-time homeowners can receive low-interest, 30 or 40 year fixed-rate loans and assistance with closing costs and mortgage down payments in exchange for buying a home in the town where they work. The goal of the program is to increase homeownership while easing congestion on the roads.
Under the “Live Where You Work” program, eligible properties include one-family units, condominiums, and 2- to 4-family unit properties that are more than 5 years old and located in a state-designated Smart Growth area. In the Burlington and Camden counties, households of up to two people earning up to $85,600 and larger families earning up to $98,440 qualify to participate. For more information on the ‘Live Where You Work’ program, visit http://www.state.nj.us/dca/hmfa/consu/buyers/close/live.html
Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://www.sellmysnjhome.com
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
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Has this ever happened to you?
Posted by admin on Aug 28, 2009 in Uncategorized
Another humorous, but true, scenario.
Call us now and we can show you how we can get you into your own place in a very short time.
Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
Connect on Facebook – http://profile.to/terryiwaniw
You Can Never Have Enough Privacy
Posted by admin on Jul 29, 2009 in Uncategorized
This is a humorous video by NJAR (New Jersey Association of REALTORS) but there is a grain of truth.
Call me now and I will show you how I can help you solve this problem for you.
Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
First Time Home Buyer Specialist
Investor Liaison
HUD Home Marketer
Seller & Buyer Community
Off: 856-795-3111 x263
Cell: 609-417-1086
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Answers About The $8,000 First-Time Home Buyer Tax Credit
Q: Who is eligible to use the tax credit?
A: The $8,000 tax credit is available for first-time home buyers only. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. All U.S. citizens who file taxes are eligible to participate in the program.
Q: Are there any payback provisions?
A: The tax credit is a true credit. It does not have to be repaid. The only repayment requirement is if the home owner sold the home within three years after the purchase.
Q: Are there income limits to qualify for the credit?
A: Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000. For married couples filing a joint return, the income limit doubles to $150,000.
Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit. Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000.
Q: What are the effective dates for the tax credit?
A: First-time home buyers would receive an $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.
Q: Is the tax credit refundable?
A: Yes. A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference. For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).
Q: What years can buyers apply the tax credit to their tax returns?
A: Buyers can take the tax credit on their 2008 or 2009 income tax return.
Q: What types of homes qualify for the tax credit?
A: All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the prior three years. This also includes newly-constructed homes.
Q: Where can I find more details on the tax credit?
A: NAHB has a consumer Web site that provides comprehensive information on the tax credit. The Web site is www.federalhousingtaxcredit.com
If you have any other questions or need further details, call us at either 609-417-1084 or 609-417-1086.
Linda & Terry Iwaniw
ReSales & Investment Realty, LLC
856-795-3111 x263
http://www.snewjerseyhomes.com
info@i-teamhomes.com
NJHMFA Offers Cash Advance for First-time Buyers
We’ve had many a buyer call us and ask how the $8000 tax credit can help them buy a home if they can’t get that money until they buy a home. A classic Catch-22. Well, NJ has come up with an answer for those first time home buyers who need the tax credit money to help them with their downpayment or closing costs.
The New Jersey Housing Mortgage Finance Agency (NJHMFA) is offering cash payments, in the form of a zero interest loan, of up to $5,000 for qualified first-time home buyers in order to help them defray their closing costs or to satisfy the downpayment requirements. This will then help new home buyers get into the housing market and buy their first home.
This zero interest loan, offered as part of NJHMFA’s “Prefund” program, would act like a cash advance against the $8,000 tax credit that is being offered to first time home buyers who purchase their home between April 8 and December 1 of this year. Basically, home buyers would be provided with the payment as a loan and would be required to repay the advance/loan when they receive their federal tax credit.
Who can get this zero interest loan/cash advance? The loan/cash advance is available to first time home buyers who:
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Arrange their financing through the NJHMFA. (You can obtain a list of participating lenders by calling their toll-free number at (800) NJ HOUSE)
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Are qualified for the tax credit offered as a part of the federal stimulus program
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Pledge to apply the proceeds of their tax credit to repay the cash
For more details about the NJHMFA’s First Time Home Buyers Tax Credit Loan Program (TCLP) you can visit the HMFA page (http://www.state.nj.us/dca/hmfa/consu/buyers/ownprg/tclp.html).
Dream the dream: You can own a home
Posted by admin on Mar 3, 2009 in Buying
If you are thinking of buying a home, you might be confused about the many issues in the news from mortgage rates to mortgage bills in Congress. But the fundamentals of buying a home really haven’t changed and, in fact, there are new incentives on the horizon that should make home buying more attractive than ever.
There are plenty of homes on the market in every price range and if you want one of them, you need only do what generations of people have done. You just have to pay attention to these basics:
- First, cultivate good credit by prudent living. Pay your bills and pay them on time. Use credit sparingly.
If you do this, you’ll earn a good credit score, which is crucial to getting a good interest rate. Research shows that many consumers believe that they have to have a high income to have a high credit score, but that’s not true. In fact, income is irrelevant to your credit score. Your credit score is a rating based on how well you live up to your obligations, pay your bills and use your credit. - Second, save money for a down payment. In the current climate, most lenders will ask you to bring some cash to the table in a mortgage deal.
- Third, find a house you love but can also afford. One path to financial freedom is to buy a modest house and build equity. When you decide to move up, you can sell your house and take a large chunk of the money from the sale and apply it to your new home. Your payment is lower while you live better. It’s the good, always-in-fashion way to live.
Congress is also planning some incentives for new home buyers. It appears first-time home buyers will get a tax credit of 10 percent of the purchase price of a home up to $8,000. That means in the year you purchase a new home, your tax bill could be reduced up to $8,000. Homeowners will not qualify for the credit if they sell the home in the first year and must live in the house for at least three years, or they will be obligated to pay back the credit.
To be classified as a first-time homeowner, you must not have owned a home in three years
Is There Another Mortgage Fraud is on the Horizon?
In the last two days we have received numerous flyers in our e-mail from local mortgage representatives telling us that First Time Home Buyers can receive their $8,000 credit UP FRONT and use this money as a DOWN PAYMENT. This sounded too good to be true so we checked it out and we were right, this was too good to be true.
We personally phoned the IRS this morning, February 27, 2009 and spoke with an IRS expert on the First Time Home Buyers Credit. This is what we learned:
The 2009 tax credit is for $8,000 and for properties purchased in 2009 by first time home buyers and does not have to be paid back provided the buyer lives there for 3 years.
The buyer can apply for the 2009 tax credit on their 2008 income tax return if they have not filed yet. If the buyer has already filed their 2008 return and received their refund or paid their taxes, they can file an amended return and receive the $8,000 tax credit without having to wait to file the 2009 taxes. Of course, the buyer can wait and apply for the $8,000 tax credit when they file their 2009 income taxes next year.
This provision, while a little confusing, was designed to jump start housing market. However, under NO CIRCUMSTANCES can a buyer apply for this $8,000 credit BEFORE THEY CLOSE ON THE PROPERTY AND USE THIS MONEY FOR A DOWNPAYMENT. They are not a FIRST TIME HOME BUYER until they have (bought) closed on the house and have the keys in their hands.
If you think about this logically, you would realize that if in fact this was an $8,000 gift for a down payment, it would be all over the news. We wouldn’t need some mortgage representative to tell us about it. This very loose interpretation of the First Time Home Buyers credit is just another attempt to get around the rules.
We can think of some serious ramifications of applying for a tax credit you have yet to earn. We can sum it up in two words TAX FRAUD. We do not want any mortgage representative telling our buyers to commit fraud. We can imagine some nightmare scenarios that we do not wish to be involved, the least of which the buyer does not settle, for whatever reason and has applied for and received the $8,000 credit. The worst of this is that when the ‘buyer’ is audited the following year, for applying for a tax credit that they did not earn and they tells the auditor that their real estate agent told them to file for the money.
We suggest that anyone who is interested in finding out the FACTS regarding this $8,000 tax credit for first time home buyers, that they call the IRS directly at 1-800-829-1040 and ask to speak to an agent who is familiar with the FIRST TIME HOME BUYERS CREDIT and ask the direct question, “Can a first time home buyer apply for the $8,000 credit before they close on a property and use this money for a down payment?” The answer will be NO. But check it out for yourself. If you have a buyer who has been told this by a mortgage rep and does not believe you when you tell them they cannot apply for this credit before they close on the property, give them the IRS number. Keep in mind that you are calling the Federal Government and will be on hold for 15-20 minutes. But it is worth the wait to learn the facts. Use your speaker phone, the time will fly by.
If something sounds too good to be true, it is our responsibility to wade through the muck and verify, verify, verify. The last thing we need is another mortgage catastrophe a few years out
Linda Kerr Iwaniw & Terry Iwaniw
RESALES & INVESTMENT REALTY, LLC
Haddonfield, NJ.
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