The President signed the bill to extend the homebuyers tax credit. The bill not only included an extension but also added credits for "non first time homebuyers".

The $8000 first time buyer credit was extended to purchases made from January 1st, 2009 - April 30th, 2010. The original expiration date was November 30th 2009. The credit is available to individuals that did not own a principle residence in the United States 3 years prior to the purchase of a home.

The new provision in the bill includes a credit for people that have lived in their former home for an extended period. If you purchase a new home and have lived in your previous home consecutively for 5 of the previous 8 years, you would be eligible for a credit of $6500.

One of the most important parts of this new bill is that the first time homebuyers credit for military personnel that have extended duty service outside of the US for at least 90 days from 12/31/08 - 5/1/2010 is extended another year until April 30th 2011.

So those of you PCSing to Patrick AFB, from overseas, in the next few, years will be able to take advantage of this tax credit.

The income limits on the tax credits are $125,000 - single and $225,000 married.

The government has added some anti-fraud provisions - you'll need to include you closing statement with your tax return.

This article is part of "The Patrick AFB Online Relocation Package".




Many families PCSing to Patrick AFB, end up finding their home in Viera. I think some of the main reasons are that Viera has a lot to offer and it is within a reasonable commute time to the base (15-25 minutes).

Viera is a master plan community that started home building in the early 90's and is still building today. Currently Viera has about 19,000 residents and when it is completed will cover about 22,000 acres. It has a large variety of homes starting just under $100,000 up to $1,000,000+ all within a few miles of each other. The various neighborhoods cater to many different lifestyles and the whole area is anchored by a central commercial / government area. A great amount of green space has been left with interconnecting walking trails, as well as five community parks and a huge 125 acre Viera Regional Park.

Viera doesn't have its own zip code yet, so when looking for homes online, understand the Viera is split in half with the southern part being in Melbourne (32940) and the northern part being in Rockledge (32955).

The schools that service Viera have a great reputation. There are three elementary schools (1st-6th), two middle schools (7th-8th), and Viera High School that opened in 2006.

In 2005 an outdoor shopping complex - The Avenue Viera opened with many national as well as local stores. It's become very popular and is a great place to shop, dine, or see a movie. Viera is also home to two public golf courses and a great local zoo. The Washington Nationals use Space Coast Stadium for thier spring training and the rest of the time it's the home of the Brevard County Manatees (Single A).

Viera has a top notch VA Outpatient Clinic and in 2011 the 100 bed acute care Viera Hospital will open.

Schools:

Quest Elementary
Manatee Elementary
Ralph Williams Elementary
Kennedy Middle School
McNair Middle School
Viera High School

Recreation:

Brevard Zoo
Duran Golf Club
Viera East Golf Club
Viera Regional Park
Space Coast Stadium - Washington Nationals Spring Training Site

Shopping:

The Avenue Viera
Super - Target
Wal-Mart Super Center

Health-care:

Viera Hospital
VA Clinic


As you can see Viera has a lot to offer and is very close to the base, and that is why so many families end up settling here.



VIERA MASTER PLAN

This is a really nice waterfront home in the heart of Viera FL.

• 3 Bedroom / 2 Bathroom
• Concrete block construction - 1996
• 1873 square feet - under air
• .14 acre lot - Waterfront (excellent views)
• 2 car garage
• Viera Schools (All "A" rated)
• Very near the community pool
• New roof - 2005
• 15 minutes from Patrick AFB

Offered at $195,000

This article is part of "The Patrick AFB Online Relocation Package".

Wow!!! For those of you PCSing to Patrick AFB in 2009 there is a huge benefit that just got passed in the stimulus bill: $8000. The fully refundable, $8000 (or 10% of the purchase price, up to $8000) is a tax credit for first time homebuyers that purchase a home between January 1, 2009 and November 30, 2009.

Here are the details:

What is a first time homebuyer?
Someone who has not owned a principle residence in the past three years. So many of you coming from overseas who have owned a home in the past, but have been living on base for three years will still qualify.

Are there income limits?
Yes, $75,000 for singles and $150,000 for couples.

Will I have to pay this back when I sell the home?
If you stay in the home for three years you do not have to pay it back, anything less and you will have to pay it back. So this is a gift, a grant, free money. Well not exactly free the taxpayers are paying for it.

Here are some typical scenarios:

1. At the end of the year you typically owe $7000 in taxes, and from your withholding they have taken $7000. When you file your 2009 taxes, you will get a check for $8000, which you can use for whatever you want: furniture, clothes, vacation, etc.

2. At the end of the year you owe $7000 in taxes. From your withholding they collected $8000. In this scenario you would usually get $1000 refund check. With this tax credit you will get a refund of $9000.

3. You owe $7000 in taxes. They withhold $6000. In this scenario you would normally have to pay $1000. With the tax credit you will get a refund of $7000 ($8000-$1000).

This money can not be used for a down payment, but will be refunded from your taxes. All you need to do to get this credit is claim it on your 2009 tax return.


With interest rates hovering around 5% (at the time of writing this), prices falling into affordable ranges, and this generous tax credit, this just might be the time to buy a home.

John S Murphy is a full-time REALTOR® with RE/MAX Elite in Melbourne, FL, and the creator of AmericanAirmanHomes.com, a website that specializes in Military PCS, DoD, civilian, and retired military relocations to and from the Patrick AFB area in Florida. Please feel free to visit the website where you can search the entire Brevard County MLS.

This article is part of "The Patrick AFB Online Relocation Package".

Once again this year Walt Disney World is offering their Armed Forces Salute. It is a great deal for active and retired US Military. Disney World is only an hour trip from Patrick Air Force Base, and it is a deal that many service members should explore.


Here are the details from the Disney Website:

"Through December 23, 2009, each active or retired member of the U.S. military may obtain one complimentary 5-day "Disney's Armed Forces Salute" ticket with Park Hopper® and Water Park Fun & More options. This ticket is valid for five days of admission into the four Walt Disney World® theme parks, plus a total of five visits to a choice of a Disney water park, DisneyQuest® Indoor Interactive Theme Park or certain other attractions. During this offer period, active or retired U.S. military personnel (or their spouses, but not both) may also make a one-time purchase of up to a maximum of five 5-Day "Disney's Armed Forces Salute Companion" tickets (one theme park per day) for $99 per ticket, plus tax, for family members (including spouse) or friends. Although this ticket for family members and friends does not include either the Park Hopper® or Water Park Fun & More options, this ticket can be upgraded to add either such option, or both, for an additional $25, plus tax, per option. Actual prices may be less. All tickets and options are non-transferable and must be used by December 23, 2009.

Activated members of the National Guard or Reservists (with orders showing active status after January 1, 2008) and active or retired members of the United States Coast Guard are also eligible to participate in this offer."


Tickets and more information can be obtained from the ITT office at Patrick AFB. Building 415, Phone:(321) 494-5158

This article is part of "The Patrick AFB Online Relocation Package".

The new Patrick AFB BAH rates for 2009 are now available. There was a slight increase over last year and with the possibility of interest rates dropping to all time lows in the near future, 2009 might be one of the best buying opportunities in years.

2009 BAH Rates - Patrick Air Force Base

This article is part of "The Patrick AFB Online Relocation Package".

Many, if not most of my clients decide to use their VA benefit and go with a VA loan and for many reasons it's a great idea. Also many decide to do a 100% financing VA loan (no down payment) and I think that is a great idea too, but one that involves some risk.


One of the biggest advantages of a VA loan is that you can still do 100% financing. With all of the recent problems is the mortgage industry, 100% financing which was readily available a few years ago in many types of loans is no longer an option.

Another advantage is that there is no PMI (Private Mortgage Insurance) that gets added to your home payment. Typically PMI can cost between one half to one percent of the loan, according to the Mortgage Bankers Association of America. On a $150,000 home with 10% down the PMI can range anywhere from $56.25 to $112.50 per month added to your payment.

Although there is no PMI with a VA loan there is what is called the "VA Funding Fee". This paid by the veteran upfront so they contribute to the cost of their benefit. For discussions here will use the regular military rates for first time use of the benefit. Reserves and National Guard funding fees are a little higher.

            - For 100% financing the funding fee is 2.15%

            - For 95% up to 90% financing the funding fee is 1.5%

            - For 90% financing or more the funding fee is 1.25%

The funding fee does not have to necessarily come directly out of the veteran's pocket. It can be paid by the seller through negotiation ,as long as all the seller total contributions don't exceed 4%. Most typically it just gets added to the loan. Here are some examples of this scenario:

              $150,000 purchase price:


            - 100% financing:  $150,000 x 2.15 % = $3,225 (funding fee) so the veterans' total loan will be $153,225 ($150,000 + $ 3225).

            - 95% financing: $150,000 - $7500 (5% down payment of $150,000) = $142,500. $142,500 x 1.5% = $2138 (funding fee) so the veterans' total loan will be $144,628 ($142,500 + $2138).

            - 90% financing: $150,000 - $15,000 (10% down payment of $150,000) = $135,000. $135,000 x 1.25% = $1688 (funding fee) so the veterans' total loan will be $136,688 ($135,000+$1688).


The logical next question is should I do 100% or should I put money down. That depends on many factors, but the main ones are how long will you be staying in the home and does your house payment work into your BAH. Most of my clients will only be here at Patrick AFB for 3-5 years and under that scenario, 100% makes a lot of sense. Here is why:

Let's use the same $150,000 purchase price, you will need to sell the home in five years, and we'll use a 6.5% interest rate on the loan. The interest rate can be higher or lower, but we'll use this one for illustration purposes.

            - 100% financing your monthly payment (P&I -just Principle & Interest) will be $968.49.

            - 95% financing your monthly payment (just P&I) will be $914.21.

            - 90% financing your monthly payment (just P&I) will be $863.96.

It looks like if you put down 10% you will be "saving" saving a lot of money, and if you plan on staying in the home for a long time you definitely will, but first you need to have $15,000 in available cash. The difference in the payment is $104.53 a month (100% vs. 90%) that that translates into $6271.80 over the five years. But you had to shell out $15,000 in cash to get the $6271.80 in savings and many of my clients prefer to hold onto their cash to use for other things. This is a personal decision and you have do what is best for your lifestyle.



Here is the one huge caveat with the above scenario. For obvious reasons a 100% VA loan has a lot of attractive qualities. But if you are staying in your home for a short period of time, there is risk. Under the above 100% scenario after 5 years (if you made all your payments and no extra payments) you will still owe $143,435.  Assuming that the home's value stays the same, you will have $6,565 in equity at that point. ($150,000 (market value of the home) - $143,435 (balance of loan after five years) = $6,565)

Now you need to sell the home. The total costs for you to sell will be around 8% (estimate) of the selling price, which includes Realtor fees and other closing costs. In any scenario in order for you to break even, the home needs to appreciate at least 8% over those 5 years. If it doesn't appreciate that much or the home depreciates you will be digging into your equity. If the costs exceed the equity in your home you will have to pay the difference out of your pocket at the close of the sale. So the more equity you have, the better position you are in. If the home appreciates more than the 8%, then anything above that is money going into your pocket. Congratulations you have just made money in real estate, Mr. or Mrs. Monopoly.

So you can see there is definite risk involved, especially in the current market. The value of homes in the area has decreased dramatically since their highs of 2005. Are we at the bottom (we are closer to the bottom than we are to the top) and how much would a home purchased now appreciate in 5 years? If I had the absolute answers to these questions, I'd be a very rich man or be hosting a show on some cable business channel.
 

This article is part of "The Patrick AFB Online Relocation Package".

There are many myths about buying homeowners insurance in Florida. I've had many clients tell me that they have heard that it is very expensive and that you might not even be able to get insurance.

First, I can equivocally state that if you decide to purchase a home in the area you will be able to get it insured.

Now, is homeowners insurance expensive on the Space Coast? Well that's a relative question. Compared to other areas of the country it is, but due to various legislative actions and other factors, rates have fallen over the past few years.

There are many factors that go into how the insurance companies come up with local rates, but here are some of the highlights:


Age of home - Newer the better (updated building codes)
Type of construction - Concrete block is better than Frame construction
Distance from the water (Ocean and River)- Further the better (due those pesky hurricanes: BTW we don't get that many)
Pool or no pool - Pool home will be more expensive
Other various wind mitigation factors are a plus - hurricane shutters, shape of the roof (a hip roof (pyramid) is best), how the roof is strapped to the walls, etc.


Buying home insurance is just like everything else, you need to shop around. I know many in the military have great trust in USAA and they should. One thing I suggest is to get a quote from USAA and check into a few local companies to see where you can get the most reliable and best deal. In my experience sometimes USAA has the better deal and sometime they don't. So I can't stress enough; you need to shop. I have seen new homes on the mainland with rates as low as $600-$700.

One thing I suggest you have done is a wind inspection. The inspection will cost around $100 and the inspector will check various items, roof, window coverings, etc. After you receive the report you can give it to the insurance company, and if certain factors are met, many insurance companies will reduce your rate. The home inspection company that I like to use, includes this service in their regular home inspection at no extra charge.

Finally, I also suggest purchasing flood insurance. Flood insurance is a separate policy from your homeowners, but can be obtained from the company where you purchased your insurance. You are required to have flood insurance if your home is in a high risk area. There are some areas in Brevard County that are considered high risk and others are not. But if it is not required, I still suggest purchasing it anyway, just for piece of mind and it is only a few hundred dollars a year for non-high risk. It doesn't matter where you purchase your flood policy, because it will cost the same since the rates are set by the government (FEMA -National Flood Insurance Program).

Rest assured you will be able to get insurance for your new Florida home and it is not as costly as you might have heard. Just remember to SHOP AROUND.

This article is part of "The Patrick AFB Online Relocation Package".

When looking for a home on the various online home search sites, you will inevitably come across the term "short sale". I have had many clients contact me and ask what that term means. Many of my PCSers are under the impression that a short sale will take a "short" time to complete and since they are very interested in getting into a home quickly, because they will be staying in temporary housing or a short term rental while they look for their home. The truth is that the term short sale has nothing to do with the time that it will take to complete the sale, and if it did, it should be renamed -  an excruciatingly long, bang my head against the wall, sale.

Simply put the "short" in short sale refers to that bank getting shorted on what is owed to them at the completion of the sale.  The seller of the property owes more on their home (loan balance and sales costs) than it will sell for in the current market.

An Example:

The sellers can sell their home for $175,000 in the current market, but they owe $200,000 (mortgage loan balance) plus $10,500 in selling costs. So in order to complete the sale the bank has to agree to take a loss of $35,500 ($200,000 + $10,500 -$175,000 = $35,500). Why would a bank do this? This type of sale is less damaging to the bank's bottom line. An outright foreclosure is much more expensive for the bank and will probably result in a bigger loss. Also the property will be abandoned and will certainly deteriorate over time resulting in a lower price. While the sellers and their agent are negotiating a short sale with their lender, they are able to stay in the home and will continue to maintain the property. These can be difficult transactions to complete with a lot of extra paperwork and it requires the sellers to prove to their lender that there is a financial hardship.

It sounds like a great deal, huh? We'll it can be if you have the patience and don't need a home right away. No one has given me a definitive reason why these deals take so long. I've heard the banks are just overwhelmed with these types of deals, that the banks are just dragging their feet, to government conspiracies.  Whatever the true reason is, the overwhelming majority of these deals take months and months to complete, if at all.

The Bottom Line: After being confronted with these facts, I have very few clients PCSing to Patrick that want t persue this option. Many just want to get settled and their belongings are in storage and that could get costly for this type of wait. But, with about 19% (as of 9/30/08) of the current homes for sale in Brevard County falling into the short sale category, and if you have a place to stay for a while, or want to rent for six months or longer, one of these short sales might be an attractive option. Just be prepared to wait and wait and wait....

This article is part of "The Patrick AFB Online Relocation Package".

One question that I will inevitably get asked when showing homes to a customer is, "What are the property taxes going to be on this property"? It seems like there should be an easy and straightforward answer. After all, the listings on the local MLS and national websites have the current property taxes displayed prominently. One would assume that the taxes would be around that figure. That could be a very expensive assumption.

Due to various constitutional amendments and laws, I feel Florida has created one of the most convoluted and confusing tax systems in the US.  Any experienced Realtor can give you a very rough estimate on the spot, but allow them to do a little research and the real pros will be able to give you a pretty accurate estimate. If you want to know more about this subject please read on. But let me warn you, this is not for the novice or those that become bored easily. These will be precious minutes of your life that you will never get back.

Ok, you have been warned, let us proceed with caution.

First a few terms you need to become familiar with:

Mill - One one-thousandth of a United States dollar.

Millage Rate(Tax Rate) - Is set by the local communities and currently ranges from 15.08 to 20.49 in Brevard County and is multiplied by the taxable value / 1000 to come up with the property tax.

Homestead Exemption -  is a special property tax exemption on your primary residence, not on a second home or investment property. Currently the exemption is $50,000 for all non school related taxes and $25,000 for school taxes (I'll explain this in more detail later). New home owners must file for this exemption at the latest between January 1st and March 31st in the calendar year following the purchase of their home. After filing for the exemption, as long as there are no changes to the deed or eligibility status, the exemption will automatically renew every year.

Save Our Homes (SOH) - Florida amended its constitution in 1992 with an amendment known as Save Our Homes. What it did was to put a "cap" on the annual increase of the  assessed value of a homesteaded property at a maximum of 3% or the Consumer Price Index whichever is lower.

Market Value - As the local property appraiser's website states, "Market value is the most probable selling price, based on the actual sales of similar properties, less the typical costs of sale." This number is not what the home will sell for, and in my experience has very little to do with real world costs and values, since this number is figured out once per year and market conditions typically change throughout the year. It is a starting point for figuring out the property tax.

Assessed Value - From the property appraiser's site, "The assessed value may be less than the market value if the property is a residential property having homestead exemption and is therefore protected by the "Save Our Homes" Constitutional assessment limitations." What ????? I go into more detail later.

Taxable Value -  "The taxable value is the assessed value less any applicable exemptions" (Homestead, and a few other special exemptions, I won't go into). This is the value that they multiply the millage rate to come up with your property tax.

So why would the current property tax listed on the MLS be different than what you will eventually pay. It depends on two factors: How long has the seller lived in the house and if it is the primary residence of the seller.

First Scenario:

If the seller has been living in the house for many years their assessed value is artificially low. Why? Because of the Save Our Homes amendment of 1992. As the value of property in Brevard County shot up, especially between 2003-2005 (72%), their assessed value could only go up 3% a year. If this is their primary residence, they also have their homestead exemption applied to the assessed value to come up with the taxable value. When the house is sold, the home is reassessed at the market value and then the assessed value and market value will be the same. If you plan on using the home as your primary residence you can file for a homestead exemption and  then your taxable value will become the assessed value minus this exemption. In this scenario you taxes will be higher than what is listed on the MLS.

Second Scenario:

If the home is not a primary residence of the seller and you plan on using it as your primary residence, more than likely the taxes will be lower than what is listed on the MLS. Why? Because the seller has not had the Save Our Homes protection and the assessed value has fluctuated naturally with the market. Also, since the seller cannot use the homestead exemption on the property and you will qualify for the exemption, your taxable value will be lower than the sellers.

Has your head exploded yet? If it hasn't, the next paragraph definitely will cause cranial detonations.

In January of 2008 the people of Florida made another change to their constitution with Amendment 1. One part of the amendment was to "double" the homestead exemption from $25,000 to $50,000. I believe that many homeowners thought that it would make a big difference in their tax bills. But the devil is in the details. It did provide a $50,000 exemption on parts of the tax bill that are not school related and kept the $25,000 exemption on the school portions. The unfortunate thing is that the school portion of the tax bill makes up the majority of the property tax bill. So in reality people are only saving a few hundred dollars. Silly, silly Floridians.

There are other things I won't go into like, Non Ad Valorem taxes and "portability" because if you are still reading this, anything more might push you over the edge.

This is just a thumbnail sketch of a multitude of scenarios that can take place. As complicated as this appears, a true Real Estate Professional, given a little time, can give you an accurate tax estimation for your new home.