The US Treasury announced its plan today to purchase up to $500 Billion worth of existing assets and loans that are in danger of defaulting from banks. The reason they are doing this…to clean up the balance sheet of these banks in the hopes that they will start lending money again. The economy needs credit to begin flowing again, not contracting. Credit lines, credit cards, mortgages, car loans have all been drying up over the past year and it has been damaging this country’s ability to conduct business.
The government will start by committing up to $100 Billion immediately and see how this works. Once this money has been used they will analyze the effects and continue with their plan and use all of the $500 Billion or maybe more if the plan is working. If it is not working?? I guess they will figure something else out.
One thing is for sure…Wall Street definitely liked the announcement. The stock market surged today closing up 497 points! I have learned not to get too excited about the stock market though. Wall Street seems to have a knee jerk reaction to almost everything lately. Remember last month when the Treasury Secretary Timothy Geithner announced the outline of this same program and the market went down 380 points immediately. Isn’t this the same plan? So the market did not like what he said so it dropped like a rock. Now they like what is being said and it goes up 500 points. Nothing has actually happened yet…it is all just promised so far. I think the market should actually move based on actual results not promises. Anyway…
I like the idea and like I have said before the government is making some good moves, but these things will take time to trickle through the system. So if the stock market goes down 500 points tomorrow, don’t say that the plan isn’t working. Give it time.
The recent changes in the market should help interest rates stay low and possibly even make them drop even further so if you had been thinking about buying a home or refinancing you may be pleasantly surprised.
For more info on this plan check out http://finance.yahoo.com/news/Stocks-surge-on-bank-plan-apf-14721874.html
For a refinance or a purchase loan check out http://www.thebriteway.com/.
Happy Tuesday!
Tuesday, March 24, 2009
Friday, March 20, 2009
Some Positive Signs for the Housing Market
The FED is planning on buying up to $300 billion of long-term government bonds and an additional $750 billion in mortgage backed securities guaranteed by Freddie Mac and Fannie Mae. This will help ease the credit crunch that has been going on. Some of this money is coming from the $750 billion rescue package passed last year.
The announcement of these purchases had a direct impact on mortgage rates. Rates have dropped about .4% over the past two days. Mortgage applications have been at their highest levels of the year over the past two weeks and with rates dropping again they should be even higher this week. These lower rates will allow more people to qualify for refinance loans and purchase loans which will ultimately help the economy.
This is not a fix all, but it is part of the overall plan to turn the housing market and the economy around. The government has implemented or put into place guidelines for:
1. A first time homebuyer tax credit of $8,000
2. Mortgage Refinances at 105% loan to value
3. Loan Modifications for all homeowners who qualify, not just people who are behind on their mortgage
4. Lowered the Federal Funds rate to 0%
5. Purchased or is purchasing $750 Billion worth of mortgage backed securities
I am sure they are not done yet, but this is definitely a good start. These guidelines will take a little while to trickle through the system, but once they have been implemented and completed the housing market should show sign of a recovery.
If you would like to refinance or purchase a home check out www.thebriteway.com and give us a call.
Happy Friday everyone!
The announcement of these purchases had a direct impact on mortgage rates. Rates have dropped about .4% over the past two days. Mortgage applications have been at their highest levels of the year over the past two weeks and with rates dropping again they should be even higher this week. These lower rates will allow more people to qualify for refinance loans and purchase loans which will ultimately help the economy.
This is not a fix all, but it is part of the overall plan to turn the housing market and the economy around. The government has implemented or put into place guidelines for:
1. A first time homebuyer tax credit of $8,000
2. Mortgage Refinances at 105% loan to value
3. Loan Modifications for all homeowners who qualify, not just people who are behind on their mortgage
4. Lowered the Federal Funds rate to 0%
5. Purchased or is purchasing $750 Billion worth of mortgage backed securities
I am sure they are not done yet, but this is definitely a good start. These guidelines will take a little while to trickle through the system, but once they have been implemented and completed the housing market should show sign of a recovery.
If you would like to refinance or purchase a home check out www.thebriteway.com and give us a call.
Happy Friday everyone!
Thursday, March 19, 2009
Update on Obama's Housing Fix - Help For You
This is an update to my first article. On March 4th the government passed a housing bill aimed at reducing the number of foreclosures and helping homeowners reduce their monthly payments.
Banks and servicers are still updating their systems to implement the changes. These companies are also waiting on clarification for some parts of the bill. It may take a few more weeks for these companies to be ready to start taking applications for refinances and modifications. Just be patient.
In the meantime the government has created a website that you can go to : http://makinghomeaffordable.gov/ . This website can help you figure out if you will qualify for the new programs that are being put into place.
Just because the banks are not completely ready to take on this program does not mean that you can’t call them. Many of the banks are taking down names and numbers of the customers that call them. Then once they have the program in place they will return these customer’s calls.
The good news is that the four largest servicers in the country have agreed to participate in the program – Wells Fargo, CitiBank, JP Morgan Chase and Bank of America. This is huge! This means that most of the other banks will likely follow their lead. So help for you could be on the way!
Read an update on CNN Money at - http://money.cnn.com/2009/03/19/news/economy/Obama_foreclosure_plan/index.htm?postversion=2009031909
Check out details of the new program at http://www.treas.gov/initiatives/eesa/
If you need help with a refinance or a purchase check out www.thebriteway.com and give us a call.
Happy Thursday Everyone! Get ready for March Madness!!!! Go Heels!
Banks and servicers are still updating their systems to implement the changes. These companies are also waiting on clarification for some parts of the bill. It may take a few more weeks for these companies to be ready to start taking applications for refinances and modifications. Just be patient.
In the meantime the government has created a website that you can go to : http://makinghomeaffordable.gov/ . This website can help you figure out if you will qualify for the new programs that are being put into place.
Just because the banks are not completely ready to take on this program does not mean that you can’t call them. Many of the banks are taking down names and numbers of the customers that call them. Then once they have the program in place they will return these customer’s calls.
The good news is that the four largest servicers in the country have agreed to participate in the program – Wells Fargo, CitiBank, JP Morgan Chase and Bank of America. This is huge! This means that most of the other banks will likely follow their lead. So help for you could be on the way!
Read an update on CNN Money at - http://money.cnn.com/2009/03/19/news/economy/Obama_foreclosure_plan/index.htm?postversion=2009031909
Check out details of the new program at http://www.treas.gov/initiatives/eesa/
If you need help with a refinance or a purchase check out www.thebriteway.com and give us a call.
Happy Thursday Everyone! Get ready for March Madness!!!! Go Heels!
Wednesday, March 18, 2009
What Will a $200,000 Home Cost?
If you are looking at buying a home and wondering what the payment will be there are some websites out there that can help you. Here are a couple:
www.bankrate.com/brm/mortgage-calculator.asp
www.mortgagecalculator.org/
Just plug in the figures and out pops your monthly payment. Just remember that you need to figure in the cost of mortgage insurance, homeowner’s insurance, home owner association dues and taxes. These four things can make your payment much higher that you think.
Lets take and average $200,000 house and figure out what the down payment and the monthly payment will be. We are going to use a 96.5% loan to value FHA mortgage – fixed 30 year - to purchase this home. We have negotiated into our contract that the seller will pay all of the closing costs.
Down Payment = $200,000 * 3.5% = $7,000
Base Loan amount = $200,000 * 96.5% = $193,000
Up Front Mortgage Insurance = $193,000 * 1.75% = $3,377.50
Total Loan Amount = $196,377.50 – with FHA loans the up front mortgage insurance will be added to the base loan amount.
Monthly Payment:
Principle and Interest at 5.5% = $1,115
Monthly Mortgage Insurance = $193,000*.55% = $1,061.50/12 = $88.45
Taxes = $3,000/12 = $250.00
Insurance = $1,200/12 = $100.00
Total Payment = $1,553.45
So your total payment on an average $200,000 home will be $1,553.45. This is something that you want to know before you start looking at homes. For more help with this visit www.thebriteway.com and give us a call.
Happy Wednesday!
www.bankrate.com/brm/mortgage-calculator.asp
www.mortgagecalculator.org/
Just plug in the figures and out pops your monthly payment. Just remember that you need to figure in the cost of mortgage insurance, homeowner’s insurance, home owner association dues and taxes. These four things can make your payment much higher that you think.
Lets take and average $200,000 house and figure out what the down payment and the monthly payment will be. We are going to use a 96.5% loan to value FHA mortgage – fixed 30 year - to purchase this home. We have negotiated into our contract that the seller will pay all of the closing costs.
Down Payment = $200,000 * 3.5% = $7,000
Base Loan amount = $200,000 * 96.5% = $193,000
Up Front Mortgage Insurance = $193,000 * 1.75% = $3,377.50
Total Loan Amount = $196,377.50 – with FHA loans the up front mortgage insurance will be added to the base loan amount.
Monthly Payment:
Principle and Interest at 5.5% = $1,115
Monthly Mortgage Insurance = $193,000*.55% = $1,061.50/12 = $88.45
Taxes = $3,000/12 = $250.00
Insurance = $1,200/12 = $100.00
Total Payment = $1,553.45
So your total payment on an average $200,000 home will be $1,553.45. This is something that you want to know before you start looking at homes. For more help with this visit www.thebriteway.com and give us a call.
Happy Wednesday!
Tuesday, March 17, 2009
Increase Your Tax Return - Tax Tips
If you purchased a home in 2008 and it was your first home and your primary residence then you may be able to increase your refund by as much as $7,500! If that home you purchased in 2008 was not your first home, but was the first home your owned in the past three years and was your primary residence then you could qualify for $7,500 off your taxes too.
Here is how it works: http://turbotax.intuit.com/support/kb/tax-content/tax-tips/6360.html
1. If you made $75,000 or less as an individual and $150,000 or less as a married couple in 2008 then you can claim 10% of the purchase price of your home or $7,500 whichever is less.
2. So you purchased a $200,000 home in 2008 and you meet the income requirement. You can claim 10% of the purchase price of the home which is $20,000 or $7,500 – whichever is less. So you can claim $7,500.
3. So lets say in 2008 your tax situation is:
Tax Liability = $6,000
Taxes Withheld= -$5,000
Tax Credit= -$7,500
Tax Refund= $6,500
4. The above example shows that even if you only paid $5,000 in taxes during 2008 you can still get back $6,500! So you can have the IRS give you money this year. Go get it!
5. If you do decide to tax this tax refund – it is a loan. You have to pay back this $7,500 over the next 15 years – interest free. Your tax liability will be increased every year by $500. This is a great loan, but still a loan – not free money.
When you do your taxes you will put this credit on line 69 of your form 1040. You will need to complete form 5405 as well. Consult your accountant before completing your taxes!!
The 2009 first time homebuyer tax credit is even better so if you want to look into buying a home check out www.thebriteway.com.
Happy Tuesday everyone!!
Here is how it works: http://turbotax.intuit.com/support/kb/tax-content/tax-tips/6360.html
1. If you made $75,000 or less as an individual and $150,000 or less as a married couple in 2008 then you can claim 10% of the purchase price of your home or $7,500 whichever is less.
2. So you purchased a $200,000 home in 2008 and you meet the income requirement. You can claim 10% of the purchase price of the home which is $20,000 or $7,500 – whichever is less. So you can claim $7,500.
3. So lets say in 2008 your tax situation is:
Tax Liability = $6,000
Taxes Withheld= -$5,000
Tax Credit= -$7,500
Tax Refund= $6,500
4. The above example shows that even if you only paid $5,000 in taxes during 2008 you can still get back $6,500! So you can have the IRS give you money this year. Go get it!
5. If you do decide to tax this tax refund – it is a loan. You have to pay back this $7,500 over the next 15 years – interest free. Your tax liability will be increased every year by $500. This is a great loan, but still a loan – not free money.
When you do your taxes you will put this credit on line 69 of your form 1040. You will need to complete form 5405 as well. Consult your accountant before completing your taxes!!
The 2009 first time homebuyer tax credit is even better so if you want to look into buying a home check out www.thebriteway.com.
Happy Tuesday everyone!!
Monday, March 16, 2009
You May be Able to Afford a Home Right Now!
Thinking about buying a home? Right now is a great time because of favorable buyer's market conditions both with home values and rates. When putting an offer in you want to make sure you are getting the best deal you possibly can. Most people are looking to put as little money down as they can and keep their closing costs to a minimum. How do you do that?
If you are going to use an FHA loan for your financing you can get most if not all of your closing costs paid for by the seller. FHA allows 6% seller concessions. This means that you can write into your contract that the seller is to pay up to 6% of your closing costs. Now you may think that there is no way that you would need 6% for your closing costs, but they will add up and having 6% to play with is very helpful.
In today’s market it is very common for the seller to pay up to 6% so if your goal is to bring as little money as possible to the table this will help. If you do an FHA loan and you get all of your closing costs paid for then you will only have to bring 3.5% of the sales price of your home to the close. This means that if you purchased a $200,000 house you would have to bring $7,000 to the close and that is all! Very nice! So if you thought that you could not afford to buy a home right now you may want to rethink this.
Check out http://www.jillshotproperties.com/ if you are looking at buying a home in the Tampa – Lakeland area and need a realtor.
Check out http://www.thebriteway.com/ if you need help with a mortgage – refi or purchase.
Check out this page of HUD’s website - http://www.hud.gov/buying/index.cfm for detailed info regarding purchasing a home. Great Info in here!
Have a great Monday!!
If you are going to use an FHA loan for your financing you can get most if not all of your closing costs paid for by the seller. FHA allows 6% seller concessions. This means that you can write into your contract that the seller is to pay up to 6% of your closing costs. Now you may think that there is no way that you would need 6% for your closing costs, but they will add up and having 6% to play with is very helpful.
In today’s market it is very common for the seller to pay up to 6% so if your goal is to bring as little money as possible to the table this will help. If you do an FHA loan and you get all of your closing costs paid for then you will only have to bring 3.5% of the sales price of your home to the close. This means that if you purchased a $200,000 house you would have to bring $7,000 to the close and that is all! Very nice! So if you thought that you could not afford to buy a home right now you may want to rethink this.
Check out http://www.jillshotproperties.com/ if you are looking at buying a home in the Tampa – Lakeland area and need a realtor.
Check out http://www.thebriteway.com/ if you need help with a mortgage – refi or purchase.
Check out this page of HUD’s website - http://www.hud.gov/buying/index.cfm for detailed info regarding purchasing a home. Great Info in here!
Have a great Monday!!
Thursday, March 12, 2009
Another Great Reason to Buy a Home $8,000 Reasons Why!
The US government is giving consumers unprecedented incentives to purchase a home. If you purchase a home before the end of 2009 you may be eligible to receive $8,000 in tax credits!
Here is how it works - First off you must not have owned a home in the past three years. The government will consider you a first time homebuyer if you have never owned a home or have not owned one in the past three years. Once you qualify here then you need to BUY A HOME.
Then you will qualify for the tax credit. Here is how the credit works:
Example:
In 2009 you paid $7,500 in taxes on your W2. When you do your taxes you are due a refund of $2,000. So in 2009 you will have paid a total of $5,500 in taxes to the government. Because you purchased a home in 2009 and you qualified to claim the $8,000 tax credit, you will get back the rest of your $5,500!!! You will not get the full $8,000 because you can only get back as much as you paid in during 2009. So your tax refund will be $7,500 and you will have paid the IRS nothing in 2009! How cool would it be to pay the IRS nothing for once!
Unlike the bill passed in 2008 this $8,000 does not have to be paid back! In 2008 a similar bill was passed to give a first time home buyer tax credit of $7,500, but this money had to be paid back at $500 per year.
The 2009 first time home buyer tax credit of $8,000 does not have to be paid back.
Check out: http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home#taxcredit
for more info regarding this bill.
You could not pick a better time to but a home!!!
For your refinance and purchase needs look up www.thebriteway.com.
Here is how it works - First off you must not have owned a home in the past three years. The government will consider you a first time homebuyer if you have never owned a home or have not owned one in the past three years. Once you qualify here then you need to BUY A HOME.
Then you will qualify for the tax credit. Here is how the credit works:
Example:
In 2009 you paid $7,500 in taxes on your W2. When you do your taxes you are due a refund of $2,000. So in 2009 you will have paid a total of $5,500 in taxes to the government. Because you purchased a home in 2009 and you qualified to claim the $8,000 tax credit, you will get back the rest of your $5,500!!! You will not get the full $8,000 because you can only get back as much as you paid in during 2009. So your tax refund will be $7,500 and you will have paid the IRS nothing in 2009! How cool would it be to pay the IRS nothing for once!
Unlike the bill passed in 2008 this $8,000 does not have to be paid back! In 2008 a similar bill was passed to give a first time home buyer tax credit of $7,500, but this money had to be paid back at $500 per year.
The 2009 first time home buyer tax credit of $8,000 does not have to be paid back.
Check out: http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home#taxcredit
for more info regarding this bill.
You could not pick a better time to but a home!!!
For your refinance and purchase needs look up www.thebriteway.com.
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