Private mortgage insurance companies return to market

• Traditionally, the FHA enabled low- to moderate-income borrowers to put down as little as 3.5 percent as a down payment on a home.  Beginning this month, down-payment requirements on loans insured by the FHA have increased to 10 percent for borrowers with credit scores below 580.  Borrowers with credit scores of 580 or above still will be able to put down the traditional 3.5 percent.
• Other changes to the FHA mortgage program include increasing the upfront mortgage insurance premium from 1.75 percent to 2.25 percent and reducing permissible seller concessions from 6 percent of the loan amount to 3 percent.  The FHA also has asked Congress for authority to increase the maximum monthly insurance fee from the current 0.5 percent level to 1.55 percent.
• Resulting from the more-stringent FHA policies, fewer borrowers qualify for government-insured mortgages and are turning to private mortgage insurers, who also have made changes to their borrower requirements.  For example, one private mortgage insurance company now will insure five-percent down-payment loans to borrowers nationwide.  Previously, such mortgages were not available to borrowers in markets with declining home prices, which included California.

Premiums for both private mortgage insurance and government-insured FHA loans may be tax deductible.  Additionally, in most instances, coverage can be canceled when the borrower’s equity reaches 20 percent of the original loan amount.  Borrowers are advised to review both options to decide which one works best for their situation.

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Are You Making The $64,000 Mistake?

We have all heard of the $64,000 question, but what about the $64,000 mistake! Are you making the $64,000 mistake? You certainly are if you have been paying a monthly rent of $1000 for 64 months running!

Just imagine how much better off you would have been by making home payments instead of rent payments. What about increased home equity? Homes do increase in value over the long-term.

If you purchased a $100,000 home and it went up just 3% per year, in 64 months that $100,000 home would be worth $116,000. When you compare renting, where you lost $64,000, to owning a home, where you saw an increase of at least $16,000, there simply is no comparison.

Paying rent just does not make any sense. I offer a free no obligation meeting for my rental clients where we explore this financial opportunity.

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

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© Tammy Vertrees 2010. All Rights Reserved.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

 

Technorati Tags: Renters,Homebuyers,Home buyers,Real Estate Investment

Does Moving Up Make Sense?

The following are some questions that will help you decide whether you’re ready for a Paradise home that’s larger or in a more desirable location than your current one.

If you answer yes to most of the questions, it’s a sign that you may be ready to move.

Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.

Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.

Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job, relatives, or live in a better school district.

Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.

Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.

Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.


Wondering What Your Home Is Worth? -- Let me show you. 

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

Military Veterans earn one-year federal tax credit extension

Military personnel, members of the Foreign Service, and employees of the intelligence community have an extra year, through June 2011, to buy a principal residence in the U.S. and claim the federal tax credit.  The deadline for entering a binding contract is April 30, 2011; the deadline to close a purchase is June 30, 2011. The extension applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.  All other home buyers must be under contract by April 30, 2010 and close by June 30, 2010 to qualify for the federal tax credit.

2010 Tax Credit for New Home / First-Time Buyer
The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010. 

Applying for the 2010 New Home/First-Time Buyer tax credits:  Applications must be faxed after escrow closes. The new application will be available by May 1, 2010.  We will deny the application if the 2009 form is used or if we receive the 2010 application before May 1, 2010.

Check this page often. We will add updates as they become available.

General Information: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010.  The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.

We will allocate the tax credits on a first-come, first-served basis. 

Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

Taxpayers will not be eligible for either tax credit if any of the following apply:

• The taxpayer was allowed a 2009 New Home Credit.
• The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
• The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
• The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New Home Credit:  A qualified principal residence, for purposes of the New Home Credit, must:

• Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been "purchased."
• Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.
• Be eligible for the California property tax homeowner’s exemption.
• Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

Tax credit allocation:

• A Certificate of Allocation will not be issued if:
  • The seller does not certify the home has never been occupied.
  • We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
  • We receive the application or reservation request after the total tax credits available have been allocated.
• FTB's determination may not be protested or appealed.

First-Time Buyer Credit:  A qualified principal residence, for purposes of the First-Time Buyer Credit, must:

• Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been "purchased."
• Be eligible for the California property tax homeowner’s exemption.
• Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

A first-time buyer is any individual (and the individual’s spouse/RDP, if married on the date of purchase) who did not have an ownership interest in a principal residence, either in or out of California, during the preceding 3 year period ending on the date of the purchase of the qualified principal residence. If the buyer is married on the date of purchase and either the buyer or the buyer's spouse/RDP had an ownership interest in a principal residence during the preceding 3 year period, the buyer does not qualify for the First-Time Buyer Credit even if the spouse/RDP is not going to be on title.

Tax credit allocation:

• A Certificate of Allocation will not be issued if:
  • We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
  • We receive the application after the total tax credits available have been allocated.
• FTB's determination may not be protested or appealed.

Applications: We will accept applications by fax only beginning May 1, 2010. Do not use the 2009 application. We will post more information by May 1, 2010.

Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached, as a reservation will "hold the taxpayer's place in line" until 2 weeks after escrow closes. To reserve a tax credit, the taxpayer and seller need to complete, sign, and fax to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. Taxpayers who reserve a tax credit still need to fax an application and a copy of the settlement statement within 2 weeks after the close of escrow. Taxpayers may not reserve a tax credit if the contract was entered into before May 1, 2010. We will post the reservation form and details about the process by May 1, 2010.

If you are only applying for the First-Time Buyer Credit, you will not be able to reserve the tax credit before escrow closes.

Claiming the tax credit:

• The taxpayer must receive a Certificate of Allocation from us to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.
• The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available by December, 2010).
• Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.
• If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.
• The tax credit may not reduce regular tax below TMT.
• The tax credit is not refundable.
• Any disallowance of the tax credit may not be protested or appealed.

Energizing Foreclosure Mitigation Counseling

CalHFA is pleased to announce that it has just been awarded over $3.4 million through NeighborWorks® America to provide counseling to families and individuals facing the threat of foreclosure. This is in addition to previous CalHFA awards totaling $12.6 million, which have already provided nearly 50,000 counseling sessions for Californians who are struggling with their mortgage payments.

At a time when foreclosures continue to rise and unemployment figures reach near record levels, CalHFA recognizes the critical, ongoing need for this type of funding. The Agency will work with its long-time partner, RCAC, the Rural Community Assistance Corporation, to provide this vital counseling through dozens of nonprofit, HUD-approved counseling agencies.

Acting Executive Director of CalHFA, Steve Spears, is very appreciative of the scope of CalHFA's award. "Our allocation of $3,446,188 is the largest amount awarded to any of the 35 state housing finance agency recipients.  We will put these funds to immediate use to assist Californians in need."

For more information, see the NeighborWorks America press release here:
http://www.nw.org/network/newsroom/pressReleases/2010/netNews041610.asp

Interest in Real Estate Investment Triples

Interest in purchasing real estate as an investment has more than tripled in the past year, according to a survey conducted by Move, Inc.  Nearly 17 percent of potential home buyers said they plan to purchase a home in the near future as an investment compared with 5.6 percent in March 2009, according to the survey.

The survey also found more than 10 percent of Americans planning to purchase investment property in the near future said they will pay for the property using 100 percent cash, and 12.8 percent will use cash for more than 50 percent of the purchase price and finance the remainder. Nearly half reported they will buy the property with less than 50 percent cash down and finance the remainder.  Nearly half of the potential real estate investors said they plan to own the property for six or more years; 16 percent expect to hold the property between two and five years; while 10.6 percent plan to own the property between six and 24 months.

While interest by potential home buyers in purchasing a foreclosure to live in has declined 31.1 percent in the past five months to 26.5 percent, the survey found interest in purchasing a foreclosure as an investment is on the rise, with interest in purchasing a foreclosure as an investment to fix it up and resell rising 42 percent in March.

Gold Nugget Museum presents
Paradise California - Gold Nugget Dogtown Revue 2010

Friday, April 23 / 7:00 PM 
Saturday, April 24 / 7:00 PM

It all began in April of 1859 when Willard Mining Company was operating on a claim just below Sawmill Peak. Chauncey Wright, a miner with the company, had washed out a nugget larger than any he had ever seen . It was the largest pure solid gold ever found in California. The people of Dogtown celebrated for three days and nights.

Now the Gold Nugget Museum continues to celebrate this event with many activities including a parade, a children’s costume contest, a bean feed, pancake breakfast, a spaghetti dinner, a donkey derby, plus many activities at the museum. The Law Dawgs and Pistolers will be performing along with Tent City on the museum grounds. There are more than 20 events to participate in. One of the highlights this year will be held at the Performing Arts Center on April 23 and 24, 2010. There will be the Dogtown Revue where many of the very talented persons on the ridge (including my mom, Sally Vertrees) will be entertaining with a variety of acts from singing and dancing to a ventriloquist.

Tickets:

Reserved One Price

$15.00

What Is A Home Warranty Plan?

A home warranty plan, also known as a home protection plan, is a service contract that offers homeowners a way to safeguard themselves against possible breakage or a malfunction within the home.  It's impossible to predict the future, which is why so many buyers look for that little extra peace of mind to comfort them when life unexpectedly throws them an unforeseen problem.

Who Needs A Home Warranty Plan?

Basically, anyone who purchases a home and is concerned with the cost of repairs should consider a home warranty plan.  This is especially true of first-time home buyers who may not be familiar with home maintenance.

Factoring In The Cost

When factoring in the potential cost of repairing a major appliance or other home component, a home warranty plan may not be a bad investment.  The actual cost of warranty coverage will depend on the plan chosen and the items protected.   

Who Pays For A Home Warranty Plan?

As a buyer, you can order a home warranty plan in conjunction with the purchase of your home.  However, some sellers or builders may include this type of offering as an incentive to attract potential buyers.  In this case, the plan is yours at no additional cost.  Some REALTORS® may also offer a home warranty plan as a gift to customers who buy a home through their agency.

What's Covered & What's Not

Just like a car warranty, no two policies are the same.  Coverage varies by location and issuer, and your REALTOR® can help you to choose a warranty plan that best suits your needs.  Most basic plans cover a home's heating and cooling system, electrical system, plumbing, water heater and major appliances, including a dishwasher, range/oven/cook top, garbage disposal, etc.  Coverage does not apply to items that are misused or damaged, either intentionally or through negligence.  Instead, most home warranty plans are designed to protect the homeowner from defects that result during the course of normal wear and tear.

When considering the purchase of a home warranty plan, review the complete contract and familiarize yourself with exactly what's covered under your policy.  If you want an upgraded policy, don't hesitate to ask your REALTOR® if one is available.  Most companies do not require a home inspection and will notify homeowners when their coverage is about to expire.  The good news is that most policies are renewable.

The purchase of a home is a big step and it's likely to be the largest purchase you will ever make, so be sure to consider all of the options available to help protect yourself from costly repairs.  Ask your REALTOR® for more information relating to available home warranty plans.