Santa Clara Valley Living » Resources

Federal Homebuyer Tax Credit Deadline is Quickly Approaching

vbrasil — Mon, 08 Feb 2010 23:41:05 +0000

With only three months until the new $8,000 first-time homebuyer and the $6,500 existing home buyer federal tax credits are set to expire, time is running out on an opportunity that buyers and sellers may not see again. The tax credit, which was originally created in mid 2008, then expanded in January 2009 and extended again this past November, was only designed to be a short-term incentive to drive more buyers into the housing market.

That’s why many people in Congress are saying that, come April 30, 2010 when the credit expires, “That is it!”

So the clock is ticking. The average real estate transaction, from offer to closing, takes approximately 90 days and that is just about where we are now. To meet the federal deadlines, a buyer must have a binding sales contract in place by April 30, and have the home purchase completed by June 30. To achieve those time frames, buyers need to act almost immediately. Those deadlines also mean that this is also a prime opportunity for sellers. As the April 30 deadline gets ever closer, we are bound to see an influx of home-seekers who are hoping to find a house and make an offer in time to receive the tax credit. So for sellers who have been considering moving up in the market, downsizing, or relocating, now is an opportune time to put their house on the market.

We’re at a unique time in real estate. The tax credit deadline is helping to create the “perfect storm” in the market, due to four key elements – I.I.I.P:

• Inventory: Although there are an overwhelming number of markets where inventory is down, and even with a decline in inventory year over year, there are still plenty of homes on the market for buyers to choose from.
• Interest Rates: Mortgage rates remain at near historic
lows. This means higher purchasing power for buyers.
• Incentives: The extension and expansion of the homebuyer tax credit is providing benefits to buyers who may have otherwise not been interested in getting into the market.
• Prices: Affordability remains at an all time record level nationally and in many of our local markets as well. While the urgency of trying to find and close on a home before the deadline may seem stressful, it doesn’t have to be. For those who are in the early phase of the home buying process, there are a few key things that you can do to speed up the process:
• Find A Qualified Real Estate Agent. If you do not already have one, work with a real estate agent who will be able to help identify mortgage lenders, home inspectors, lawyers and others who will play a role in helping to get the buying process completed by the April 30 deadline.
• Know Before You Go. Free online tools and mobile applications for smart phones are available to help you quickly and conveniently learn about neighborhoods and view homes on the market. Consult with your own tax advisor as to your ability to qualify for the tax credit based upon income levels, length of residency/homeownership and housing prices. Arming yourself with as much knowledge as possible in the beginning is bound to save time in the long-run.Similar Posts:

First Time Home Buyer Programs: Santa Clara

vbrasil — Tue, 03 Mar 2009 16:54:07 +0000

With the economy in it’s current state and the housing market seen as the culprit, you can expect that the government is focusing on stimulating housing and home buying. As a first time home buyer you are already guaranteed an $8000 tax credit if you purchase between January first and November of 2009.

Here is a local first time home buyer program offered by the City of Santa Clara. It is a $75,000 dollar second mortgage provided by the city towards the purchase of a home in Santa Clara. Here are some more details below:

City of Santa Clara 1st Time Home Buyer’s Financing Program

How Does The Financing Program Work?
The Financing Program helps first time home buyers purchase a single-family house, town home, or condominium located in the City of Santa Clara.

Who Is Eligible?
People who have not owned a home in the last three years, People whose annual household income is no greater than 120% of the County’s median income (as calculated based on your household size).

What is the maximum assistance amount?
The maximum City second mortgage is $75,000.

Minimum Down Payment Requirement:
3% of the purchase price, more may be required to qualify

What Are The Terms Of The Second Mortgage?
The City’s second mortgage will be a 20-year loan structured in the following way:
For the first 5 years, the City’s loan will be zero percent interest with no payments;
Starting the sixth year through the twentieth year, the City loan converts to the interest rate of the primary loan, and monthly amortized payments of principal and interest are paid.

Is there any equity share with the city if I sell my home?
No, terms are as above.

What loan programs can I go through? Can I refinance if rates come down?
You can go through any approved conventional 30 year fixed mortgage including FHA or CALHFA for the first mortgage. Yes you can refinance as long as it’s a fixed mortgage and no cash out other than to pay off the city loan.

What kind of interest rate can I expect on the first loan?
The interest rates are market rates determined based on the first mortgage guidelines on credit scores and down payment based on program guidelines.

What is the process to get this program?

Get pre-qualified to determine maximum purchase price and loan amount (apply online or request application)
Provide supporting income and asset documentation
Once your pre-approval letter is issued, go out and look for your home!
Once you are in contract to purchase, the escrow period to close will take a normal 30 day time frame to close

Schedule of 2006 income limits-120% of median income adjusted to family size:

Household Size Maximum Income

1 – $ 88,600
2 – $101,300
3 – $113,900
4 – $126,600
5 – $136,700
6 – $146,900
7 – $157,000

To get started download the prequal application: santa-clara-first-time-home-buyer-prequal

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Rebuilding Your Credit

vbrasil — Tue, 03 Feb 2009 19:06:55 +0000

In Santa Clara County credit is everything. A poor credit rating can affect your purchasing power and your ability to get a home loan. If you have a poor credit history there are many things you can do to restore your credit. Don’t rely on paying these professional institutions to restore your credit. Most of these companies are scams and offer guarantees that are unenforceable.

Feel confident that with some diligence you can restore your credit yourself and through the process learn about creating a good credit history.

Make sure your credit file is accurate. Credit files are maintained by three credit reporting agencies—Experian, Trans Union and Equifax. You can contact one of them and request a copy of your credit report for a small fee. Review the report for errors and outdated information. If you feel that any of the reported information is inaccurate, you can request that the date be removed. The credit agency will contact the creditor who has 30 days to respond and confirm the disputed items. If they do not verify it, the date will be deleted. If the creditor verifies that the information is accurate, you can write a 100-word statement explaining your position and have the credit reporting agency include it in your credit file.

Contact your creditors. Some creditors will remove derogatory information from your credit file if you pay a full or partial payment towards the debt. They may also “re-age” the account by making the current month the first repayment month, thus showing no late payments. You can call the creditor directly to do this.

Add positive information to your file. Send information to the credit bureaus that shows stability and the ability to make payments on time. For any accounts on your credit report that do not show you pay on time, you can send account statements and copies of cancelled check to show your payment history, and the credit bureaus may add them to your history. If you have long-term employment, have lived in the same place for a length of time, etc., be sure to add documentation to your file that shows this stability.

Get credit in your own name.If you are married and your spouse has had financial problems, be sure that you establish credit in your name alone.

Re-establish good credit.If you have had credit problems in the past (especially a bankruptcy or a foreclosure), it is important that you re-establish good credit. There are several ways to do this:

Get a secured credit card. Many banks will, in exchange for a sum of money deposited with them, give you a credit card. Use the card and make the payments on time. Your credit rating can quickly improve.

Obtain a secured loan. If you have a passbook savings account or can open one, ask the bank to give you a loan against that money. They keep your passbook until the loan is paid in full. Make sure the bank reports on the loan to the credit bureau.

Work with a local store. Some businesses will give you credit on a purchase regardless of your credit standing. Although you may pay a higher rate of interest, this in another way of re-establishing good credit.

Satisfy judgments, liens and collections whereever possible. Make it a priority to satisfy any unpaid judgments, liens, and collections against you, or at the very least try to negotiate with these creditors.