Mortgage News from our NEMoves Mortgage Team

Mortgage Market In Review - 7-19-10

Market Comment

Mortgage bond prices rose pushing mortgage interest rates lower. Retail sales figures came in lower than expected with a 0.5% decrease. The Treasury auctions were mixed but didn’t result in much volatility. Inflation generally remained in check as the producer price index fell 0.5%, lower than the expected 0.2% decline. Core consumer prices were slightly higher than expected with a 0.2% increase. Weekly jobless claims were not as bad as expected but continued claims increased which was bond friendly. Significant stock weakness Friday helped mortgage interest rates improve. Rates fell by about 5/8 of a discount point for the week.

The Tax Credit Has been extended!!

Here's a run down as I received it from my company:

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between the date the bill is signed by President Obama and April 30, 2010.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 6, 2009 and April 30, 2010. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
• Current home owners purchasing a home between November 6, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

Which Properties Are Eligible?

• The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.How Much Credit is Available?
• The maximum allowable credit for first-time home buyers is $8,000.
• The maximum credit allowed for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by additional factors:

• The buyer’s income
• The price of the home

Buyer Income
Under the Extended Home Buyer Tax Credit which is effective on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

Price of the Home
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

• Yes, some buyers may still be eligible for the credit.
• The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

• Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

• No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

The information contained here is not to be construed as legal or tax advice.

What is a short sale you ask?

A short sale is when a lienholder, typically the mortgage company, agrees to release their lien for less than what is owed to them.

Here's an example:
Mortgage payoff from seller: $300,000
Market value on property is $275,000
The "short" is $25,000

Short sales typically take a bit longer than a typical sale so buyers will need to keep that in mind.

If you would like more information, feel free to contact me.

Tools for real estate

Wondering how much a mortgage payment might be? Need a goal planner or a new worth worksheet? msnbc has some gret tools that I want to share. Keep in mind that these are only tools. For a real pre-approval, it's always best to speak with your mortgage officer.

Mortgage Calculator

Some happy news about our economy!

Fed Chair Says the Worst Is Over


Federal Reserve Chair Ben Bernanke said on Friday that he was optimistic the economy is about to take off.

Bernanke acknowledged that credit is still tight, especially for businesses, but he told an audience of bankers, academics, and economists that the worst is over.

"Although we have avoided the worst, difficult challenges still lie ahead," Bernanke said. "We must work together to build on the gains already made to secure a sustained economic recovery."

Bernanke called for stronger regulation of financial rules "to ensure that the enormous costs of the past two years will not be borne again."

Source: The Associated Press, Jeannine Aversa (08/21/2009)