The Internal Revenue Service (IRS) recently issued new guidelines and clarified documentation that taxpayers must submit to successfully obtain the federal tax credit for home buyers.
The federal tax credit for home buyers was extended and expanded late last year. Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000on homes purchased before April 30, 2010. Repeat buyers may be eligible for a tax credit of up to $6,500.
To receive the tax credit, home buyers must comply with the IRS’s documentation requirements,including a fully executed IRS Form 5405. On the form,which is available on the IRS’s Web site, taxpayers provide information supporting their claim of eligibility, such as income and home purchase date.
The IRS also requires home buyers to submit a copy of the closing or settlement statement that proves the transaction took place. The IRS previously said that the statement should show “all parties’ names and signatures, property address, sales price, and date of purchase.” However, since closing or settlement statements vary by state, and in some cases the form does not include both the seller’s and buyer’s signatures,the IRS has revised this requirement. As long as the closing or settlement statement conforms to prevailing local practices, the IRS will accept it.
One stipulation for repeat buyers is they must provide documentation they lived in their former property for a consecutive five years out of the previous eight years. Accepted documentation may include property tax records, hazard insurance records, or copies of annual mortgage interest statements filed with their federal taxes.
Click here for more information about the federal tax credit for home buyers, including eligibility requirements from IRS.gov
Click here to schedule an appointment with a qualified Realtor
Data from C.A.R.’s MarketMatters
February 26, 2010
In a recent Los Angeles Times article, the end of the program was explained. Home buyers hoping to take advantage of a new or extended tax credit should not procrastinate: This third bite at the apple will be the last.
Legislative advocates of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. This fact was confirmed by a lobbyist for the National Association of Realtors at the organization’s annual convention last month.
So what does that mean for potential buyers? If buyers meet the income eligibility requirements, they have until midnight April 30, 2010 to be in contract and must close escrow by midnight June 30th to qualify.
Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That is up from the current $75,000 limit for individuals and $150,000 for couples.This is a great incentive that can give the first time home buyer up to $8,000.00 back in tax credits.
FHA loans are currently available and helping a lot of folks purchase a home because of the low down payment, 3.5% of purchase price. But some changes are on the horizon. The Federal Housing Administration (FHA) won't raise the 3.5%minimum down payment requirement for mortgages it guarantees as long as borrowers have FICO scores of 580 or better. But beginning early this summer, borrowers with credit scores below 580 will be required to make down payments of at least 10% in order to participate in FHA's mortgage insurance program.
Also this spring, the Obama administration also plans to raise the upfront
mortgage insurance premiums paid by all FHA borrowers to 2.25 percent,
up from 1.75 percent now.
FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.
Following is the basic FHA loan qualification guidelines.
These are some of the most basic of FHA guidelines for qualifying for a FHA loan. If you have answered yes to most of these statements, you probably qualify for a FHA mortgage loan.
source: INMAN News, FHA
date: 1.22.10
For most of us, buying a home is the biggest single investment we’re likely to make – and we’re only likely to do it maybe once or twice in a lifetime. The process is, by nature, filled with checks and balances –and many complex details. Traditionally, agents were legally obligated to protect the interests of the home seller. Today preferences are changing. One of these changes is that more homebuyers are choosing to have their own real estate agent, known as a buyer's agent, to legally represent them.
A buyer’s agent represents you, the buyer, not the seller, and has full fiduciary duties, including loyalty to you. By definition, the buyer’s agent has your best interests in mind throughout the transaction. The benefits of buyer representation is the dedication of a buyer’s agent to the home buyer. The buyer’s agent and homebuyer establish a mutual agreement, known as a buyer agency agreement, that will entitle the homebuyer to, but is not limited by:
Loyalty The real estate agent must act in the best interest of the buyer.
Disclosure All material facts such as relationships between agent and other parties, existence of other offers, status of earnest money, seller’s financial condition, property’s true worth, commission split with other brokers, and legal effect of important contract provisions.
Confidentiality Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.
Accounting in dealings Reporting of where any money placed in the hands of the broker is kept.
Reasonable Skill and Care Arriving at a reasonable purchase price and advising the buyer of such,affirmatively discovering material facts and disclosing them to the buyer, investigating the material facts related to the sale. With a buyer agency, the interests of the homebuyer will be represented in the purchase of the home.
As you know, I am a real estate agent specializing in residential real estate on the San Francisco Mid-Peninsula. If you are think about purchasing property, I hope that you will consider contacting me to discuss your specific situation and how I can help you find and purchase your new home.
In a similar move, Citigroup Inc. will suspend foreclosure sales and evictions for 30 days through January 17, 2010 for loans it owns. Citigroup's foreclosure moratorium, however, does not extend to loans it services on behalf of other investors. Given these developments, other lenders may follow suit, so check with the lender if appropriate.
source: CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), 12/18/09