Wait...HOW much is my downpayment?!?

Declining Markets - On the face I would assume that we could categorize this market over the past year as declining. That makes sense! However, that term actually means something more to your lender. GIVE US MORE MONEY!

When you buy a home you may think that if the appraisal comes in at a good value (at or above the sale price) you will be on the right road to closing and owning your first new home! Well, hold your horses. If the home appraiser categorizes your home as being in an area that is a "Declining Market" you may not be able to purchase it with the terms you thought. Meaning you more than likely will have to put more money down on the property! Typically you would not have to worry about this going FHA. However with a conventional loan you will. The lender (Fannie Mae) originally wanted you to put down 5-6 percent. Now that your home is located in a defined "declining market" area you may have to put down 10%! OOPS! Who would have thought of that? How can you protect against looking for a home in those declining market areas? I don't know any realtor that follows that stat! I don't even know of any lender who follows that stat! Getting a loan is a hard-to-do task in this day and age for certain...

Let the buying begin (again)

So, it has passed. The dust has settled. Now, what is this new Nov.7 housing stimulus package all about? Well, if you have lived in your home for 5 out of the past 8 years ( as a primary residence) you are now eligable for a tax credit!! YEAH!! That means that if you rented your property for a couple of years but lived in it for (again) five out of the last 8 years - you can get a credit! The current $8,000 first time homebuyer credit is still in force as well. There are quite a bit of strings attached so I recommend you read up a bit to make yourself fully aware of the strings. Here is a great link to an informative site. It will get you up to speed!

BTW - How about those colts! Big game coming up Sunday night with the Patriots! Not to mention other local schools doing well in the playoffs: Carmel, Warren, Center Grove to name a few! Go Hounds!

Homebuyer Credit EXPANDED and EXTENDED

The House of Representatives has voted to pass legislation extending the home buyer tax credit until April 30, 2009.
Last night the Senate voted 98-0 to pass the legislation. Next the bill will head to President Obama to be signed into law on Friday.
While the bill extends the $8,000 tax credit for first time home buyers, it also makes available a tax credit to homeowners who have lived in their current residence for at least five years. The credit for these buyers will be capped at $6,500.Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples to $125,000 and $225,000 respectively.

Above those limits there are diminishing credits available.Housing interests, especially the National Association of Home Builders and the National Association of Realtors, has pushed strongly for the extension and the Obama administration has also lobbied heavily for its passage. However, not everyone was in favor of it.

Some critics have charged that the tax credit has merely moved sales that would have occurred sooner or later to an earlier date and that, when the credit finally does go away, the market will experience another severe downturn. A diametrically opposed opinion would have it that, while 1.4 million claims have been made, few sales were actually inspired by the credit. Others have argued that the current interest rates and low housing prices are enough of an incentive without spending tax money. The extension is expected to cost an estimated $11 billion on top of the $10 billion that has been spent to date.There have also been charges of fraud in the operation of the program. To combat this the new law has some expanded safeguards including a minimum age of 18 for obtaining the credit, a requirement that a settlement statement accompany the tax return claiming the credit and a prohibition on non-arms length transactions.Another criticism of the extension has been that it ends just as the "spring market" is getting underway. Diane Olick writing for CNBC's RealtyCheck said it "is sort of like offering cheap snow boots in July."
Robert E. Story, Jr., CMB, Chairman of the Mortgage Bankers Association (MBA), today issued the following statement in response to the passage in the U.S. Congress of legislation to extend and expand the homebuyer tax credit."At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the homebuyer tax credit is a critical step to keeping the momentum. This has been one of MBA's top single family legislative priorities, and we are very glad to see that policymakers on both sides of the aisle see the importance of this measure."The existing credit for first-time homebuyers has helped move a segment of potential homebuyers off the sidelines and into their first homes. By expanding it to qualified existing homeowners, we can help stimulate even more home purchases for qualified buyers. I also want to applaud measures in the bill that will help eliminate fraudulent use of the tax credit."

Short Sales - The Family Hunting Game

I know that short sales could be a great opportunity for some Buyers. It is obviously a sign of distress when it comes to sellers. Hunting down and capturing a short sale home (prior to foreclosure) certainly has become the latest sport for the Buyers in the market place. What any good "sportsman" has to do is to get acquainted with the approach and know their opponent - that is the key to success. Extremely low-balling a home is kinda like firing a warning shot above their heads. In my experience it will make the lender run away and not respond. Do your research (determine the value of comparable homes, derive a value on the property, make an educated and well thought out offer within 85% of the determined value NOT LIST PRICE) and then fire your direct shot. Do you think that the lender has not already determined the home's value? Knowing what they know is the key. That approach will not scare them away - it will more than likely really make them appreciate your offer and take it much more seriously. The "warning shots" take up a lot of time for a lot of people and most of the time, do not pan out.

I am not a hunter. However the analogy seemed to fit in quite well here!