Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!

Phaseout Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

For those tracking the math in the examples above, you may be wondering where the "$20,000" came from-that is, why you divide "$10,000 by $20,000" in the first example and "$13,000 by $20,000" in the second example. Here's where the $20,000 comes into play:

The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

In other words:

 

· $170,000 - $150,000 = the $20,000 in the first example

• $95,000 - $75,000 = the $20,000 in the second example

 

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principal residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principal residence also qualify.

Higher Loan Amounts

More good news - there is an extension on the additional tier of conforming loan amounts which had been first established in 2008.  This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750.  These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.

FHFA News Release -

http://www.mortgagemarketguide.com/download/022309_final.pdf

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs - This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings - This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing-This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance-This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama's plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That's because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I've highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.

Greetings Everyone,

As the Congress and Senate deliberated and compromised on what to keep and what to throw out the $15,000 Tax Credit got the ax. Basically, this new incentive was a new proposal to adjust the previous $7,500 Tax credit that was passed in 2008. It was also going to apply not only to New Homebuyers, but to any primary residence buyer. It would have also been a true Tax Credit and not only a 15 year interest free loan from the IRS as the $7,500 Tax Credit was. The NAR believed that the $15,000 Tax Credit would have helped sell about 500,000 homes and would help the home prices stabilize.

The new tax credit that has been agreed upon and will be up for a final vote soon, is a $8,000 Tax Credit to any New Homebuyer that has not owned a home in the last three years. It is not required to be paid back as long as the Homebuyer keeps the house as their primary residence for at least two years.

The NAR believes that this tax credit will help sell approximately 200,000 new homes and even though it's not as good as the other tax credit, it will still help stabilize home prices to a degree.

I will keep you posted as I find out of any changes regarding this important issue for our industry.

Thanks,

Andi Bytyqi, MBA
President
Metro Point Lending LLC
Office: 405.513.8610
Mobile: 405.205.7585
Fax: 877.203.0303
Andi@MetroPointLending.com
www.MetroPointLending.com

Hello Everyone,

There is an event that is being planned at the Walden Creek Addition in Mustang on SW 29th and Morgan Rd.

It will be April 5-6 Saturday and Sunday. I know there will be gourmet food and wine tasting.

More info to come as I receive it.

Since we are the preferred lender for Manchester Homes we are providing some specials for anyone that buys one of their homes.

Visit www.loansbyandi.com/specialsand print the flier.

Call me or e-mail me for more info.

Andi Bytyqi

405-205-7585

andi@loanturtle.com

Hello Everyone,

I just wanted to let you know that I can sponsor you for a free website from ALAMODE.

If you would like to see what one looks like go to www.goodlifeinok.com. I sponsored this website and it was up and running within a couple of hours. It's so easy.

All you have to do is send me your e-mail and tell me that you would like me to sponsor you for a free ALAMODE website.

Send your e-mail to andi@lonturtle.com. I will then send you a personal invitation for a free website sponsored by me.

Looking forward to sponsoring your free website.

Andi Bytyqi

www.loansbyandi.com

Greetings,

I want to get your opinion on how healthy is the Oklahoma market for Investment Properties?

Please join our group at http://activerain.com/groups/OKinvestmentproperty

 

Andi Bytyqi

Greetings Everyone,

What a roller-coaster has this been lately for the rates. We have had 3-4 reprices within the day on and off for a while now. My best advise to a borrower is to be sure that they are comfortable with their purchase and not think about the rate. If you like the rate then lock it and forget about it. I do not believe in timing the market and will never advise anyone to attempt in doing that.

The Daily Advisor is a good prognosis. But even then, I would instruct your clients to just make sure that they are comfortable with their purchase and their payment and not dwell on what they could have gotten for a rate. Our experience has been that once the borrower is done with their purchase process and after 3 months, they will no longer be able to tell you what their rates are.

I will continue to post the Daily Advisor as an informational tool for you. You are able to find the same advisor from Alamode if you have a website with them. Our company is also a subscriber to The Mortgage Market Guide that gives us a more in-depth and up to date look at what the market is doing. For more information contact me anytime at 405-205-7585 or at andi@loanturtle.com.

You can visit my website at http://www.loansbyandi.com/.

Rate Lock Advisory - Wednesday Mar. 5th

Wednesday's bond market opened in positive territory but has since fallen into negative ground as stocks gain strength. The stock markets are rallying after one of today's pieces of data showed stronger than expected results. The Dow is currently up 104 points while the Nasdaq has gained 21 points. The bond market is currently down 6/32, which with yesterday's late losses will push this morning's mortgage rates higher by approximately .250 - .375 of a discount point.

The revised Productivity index for the 4th Quarter of last year was released early this morning, showing a 1.9% annual pace. This was a slight upward revision form the initial estimate of 1.8%. Since it was only a slight revision, it has not had much of an impact on this morning's trading or mortgage pricing.

January's Factory Orders report was released late this morning and also failed to show any major surprises. It revealed a 2.5% decline in new orders that matched forecasts. Today's report also revised December's orders lower by .3%. However, neither of those figures has created enough movement in bonds to affect mortgage rates.

What did make the news today was the ISM Services Index for February. It showed a reading of 49.3, which was higher than the expected 47.5 reading and indicates that the services sector of the economy strengthened compared to January. The 49.3 is still below the recessionary indicator of 50.0, but well above January's 44.6 reading. This can be considered somewhat negative news since the reading was stronger than expected.

The Fed Beige Book will be posted at 2:00 PM ET this afternoon. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008

Rate Lock Advisory - Friday Feb. 29th



Friday's bond market has opened up sharply again despite stronger than expected economic data. The stock markets are posting sizable losses with the Dow down almost 200 points and the Nasdaq down 35 points. This has made bonds more attractive to investors as they seek safe-haven from the stock volatility. The result has the bond market up 20/32 and mortgage rates improving another .375 of a discount point.

January's Personal Income ad Outlays data was released this morning, showing a 0.3% rise in income and a 0.4% increase in spending. Both were a little stronger than expected, but have not had a negative impact on bonds or mortgage rates.

The second report of the day was the University of Michigan's revision to their Index of Consumer Sentiment for February. The index was revised higher than was expected to stand at 70.8. However, as with the income and spending report, the news has fortunately had little influence on trading or rates.

Next week is fairly active with economic releases for the markets to digest. It kicks off with Monday's ISM manufacturing index for February. This is an important report and can move the markets and mortgage rates if it varies from forecasts. The week closes with the almighty Employment report Friday morning and between those two are a handful of relevant releases. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008

Visit my website at http://www.loansbyandi.com/

Rate Lock Advisory - Thursday Aug. 16th

Thursday's bond market has opened in positive territory due mostly to early stock losses. The stock markets are reacting to more credit concerns and overseas losses with the Dow down 134 points and the Nasdaq down 22 points. The bond market is currently up 16.32, but we will still see an increase in this morning's mortgage rates of approximately .250 of a discount point.

The Commerce Department reported this morning that starts of new homes fell 6.1% last month, reaching a their lowest level since January 1997. This indicates that the housing sector is still weakening, which is good news for bonds. However, this data usually does not have much of an impact on mortgage rates and couldn't prevent this morning's increase in rates.

The Labor Department said that new claims for unemployment benefits rose to 322,000 last week, exceeding forecasts of 315,000. This is also good news for bonds and mortgage rates generally speaking, but this data is also considered to be of low importance since it tracks only a week's worth of claims.

There is one piece of relevant data scheduled for release tomorrow morning. The University of Michigan will release its Index of Consumer Sentiment for August at 9:45 AM ET. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher tomorrow. Current forecasts are calling for a drop from July's 90.4 to a reading of 88.5.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2007