| 1. All homeowners who do not itemize income taxes can deduct between $500 and $1,000 from their 2008 federal taxes. |
| 2.
Anyone buying a first home between 4/9/08 and 7/1/09, will receive up to $7,500 in federal income tax credits.The tax credit is for 10% of the purchase price, but phases out for higher income homeowners. There is a catch, and that is that the money has to be repaid
over 15 years, starting 2 years after you buy the house. That makes the tax credit an interest free loan. If you take the full $7,500 tax credit, your income tax bill will increase by $500 a year for 15 years. If you sell the house before then, you'll have to pay Uncle Sam
the remaining balance. Complex issues, such as divorce, death, sale of the house at a loss and conversion of the house into a vacation home are all accounted for in the new law. |
| 3. Homeowners struggling to make payments on high interest mortgages can contact their banks and transorm their loan
into U.S. Government-Backed, 30 year fixed rate mortgages. To qualify, homeowners must have a mortgage deb-to-income ratio greater than 31%. To see if you qualify, Multiply your gross monthly salary
by 31%. As example, a homeowner earning $75,000 a year must owe a monthly mortgage payment of at least $1,938. The new Government-Backed loan cannot exceed 90% of the home's value and borrowers must prove they can repay the new loan. |
| 4. Homeowners living in neighborhoods stricken by foreclosures, where vacant properties were left run down with overgrown yards, may see improvements.
The new law provides $3.9 Billion in grants for governments in the hardest hit communities to buy and fix up already foreclosed property at a discount.. |
| 5. First time buyers or homeowners with subprime mortgages in some states can qualify for low interest loans or refinancing under a provsion allowingt
states to offer an additional $11 Billion in tax-free municipal bonds to pay for such housing projects. The actual dollar amount and the criteria for who might qualify will vary by state.. |
| 6. Homeowers strapped for cash will be able to receive pre-foreclosure financial counseling and legal services. There is $180 Million for these services. |
| 7. Mortgage companies Freddie Mac and Fannie Mae will be allowed to buy pricier mortgages, up to $625,000, which would make stable loans available to buyers in expensive cities. |
| 8. For homeowners who have fallen behind in their mortgage payments after the rate went up on their adjustable rate mortgage, and they can't refinance into a fixed rate loan because their homes have lost value,
the new law seeks to help get out of trouble. It encourages lenders to forgive some of their debt so they can refinance at lower amounts into mortgages insured by the Federal Housing Administration or FHA. The lender has to forgive all the debt above 90% of the homes current appraised value.
As example, if you bought a house for $125,000 and got an ARM for $110,000 after making a $15,000 down payment. But the house lost value. Now it's worth $100,000. Meanwhile, the ARM's rate went up and you can't afford the full payment every month. Under the new law, the lender would forgive everything you owe about $90,000.
Let's say you owe $105,000 of that original $110,000 loan. The lender would forgive $15,000 and let you pay off the loan for $90,000. The lender would not be allowed to seek any of that $15,000 later.
That allows you to find another lender who would underwrite a $90,000 mortgage to be insured by the FHA. That loan amount would include the upfront FHA insurance premium of roughly $2,700. Again there is a catch. If you take refuge in this program
you'll hav to share your home price appreciation with the FHA. IF you sell the house or refinance the loan less than a year after refinancing into the FHA loan, the FHA gets all the house price appreciation. The FHA's cut decreases over the next 5 years, but never goes below 50%.
As example, lets say you refinanced when the house was appraised at $100,000. A little over 2 years later, you sell the house for $120,000. You split that $20,000 difference with the FHA. In this case, because it's between 2 and 3 years later, the FHA gets 80%.
The FHA would get $16,000 and you would get $4,000. The equity sharing arrangement goes like this: IF you refinance or sell less than a year after getting the FHA loan, the Government gets 100% of the home price appreciation. If it;s more than a year but less than 2 years, the FHA gets 90%. The FHA's cut decreases by 10%
until the 5 year mark. Anytime after that, the FHA gets half of the appreciation, no matter how long you have the loan or own the house. . |
| |
|
| |
| More to follow… |
|
