April 30^th seems like a long way off, but for prospective Virginia Beach home buyers who are on the fence about making a home purchase, the next few months represent a countdown of sorts as huge tax credits are about to expire. Here are important details for you to know:

Tax Credit for First-Time Home Buyers
First-time home buyers may be eligible for the tax credit. The credit is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Tax Credit for Current Home Owners
The tax credit program now gives those who already own a residence some additional reasons to move to a new Virginia Beach home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

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Considering a Reverse Mortgage for Virginia Beach Home

There may come a time when, after exploring all your real estate options for the future, you decide that you really don’t want to sell your Virginia Beach home and that you’d rather “age in place.” In that case, you should investigate applying for a reverse mortgage, also known as home equity conversion mortgage (HECM). As with any program or plan that is financially based, there are many pros and cons to be considered before you make a final decision.

Eligibility: you must be at least 62 years of age, own your own home (or have a very low balance that can be paid off), and be living in it as your primary residence. Your Virginia Beach home must meet FHA property standards, and you must provide on-going maintenance and pay property taxes, association dues, and insurance. In addition, you must also agree to attend an information counseling session

Amount: Factors used to determine the amount of your eligibility include your age, interest rates, and the value of your home. Most reverse mortgages provide you with a monthly payment. The are online websites that allow you to calculate/estimate the amount. Go to AARP.com, USAReverseMortgageAdvisor.com, or ReverseMortgageGuides.org for assistance.

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Although house sales usually slow down in the winter months, this year may be different. Because the Home Buyers Tax Credit deadline has been extended and the qualifying income levels have been expanded, this is an ideal time for both first-time and repeat buyers to purchase a Virginia Beach home.

Basic facts Home Buyers Tax Credit:

• The new deadline is April 30, 2010 (June 30^th with a binding, signed contract)

• First-time buyers are eligible for a tax credit of 10% of the purchase price–up to $8000.00

• Repeat buyers (those who have lived in one residence for 5 consecutive years of the last can receive a credit of up to $6500.00.

• Income levels–$125,000 for individuals; $225,000 for couples.

The credit may be claimed on this year’s tax return (for 2009).

***Remember that a tax credit is a dollar-for-dollar deduction in what a taxpayer owes. If the credit exceeds the amount owed, a refund will be issued.

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Yes, it’s tax season again, and given the state of the economy, saving every penny is very appealing. As an owner of Virginia Beach real estate there are many deductions and tax credits you will want to take claim on your 2009 return…provided you qualify of course!!

Here are a number of money-saving ways to reduce the amount of tax you owe–or even increase the amount of your refund!

First, let me explain the difference between a tax deduction and a tax credit.  A tax deduction reduces (adjusts) your taxable income. A tax credit reduces your tax dollar for dollar. You do not have to itemize deductions to claim a tax credit.

Tax Deductions for Primary Residence

Tax deductions on your primary residence include:

• Interest paid on your mortgage
• Refinancing points paid in 2009
• Real estate taxes
• Interest on major home improvement loans
• Mortgage insurance premiums
• Home improvements required for medical care
• Any sales commission, legal fees, or closing costs associated with the sale of [city] real estate in 2009
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For you, as for most Americans, your home is your largest and most important investment. Homeowners insurance, required by mortgage lenders, protects you from losing the value of your home if disaster strikes and enables you to repair or rebuild the structure. It covers damage to your home (real property) and your personal belongings (personal property) for the hazards specified in your policy. It also covers your liability for any injuries and property damage that you or your family members (including pets) cause to other people.

Types of homeowners insurance:

HO-1 is very basic coverage, insuring against fire or lightening damage

HO-2, called “broad coverage,” also covers loss of or damage to property resulting from windstorm or hail, theft, explosion, smoke damage from vehicles and aircraft, glass breakage, removal of property endangered by covered peril such as fire, vandalism, malicious mischief, and riot or civil commotion. HO-2 also covers building collapse, freezing of or accidental discharge of water or steam from within plumbing, heating, or air-conditioning, falling objects, weight of snow, ice, or sleet, and rupture or bursting of steam or hot water heating system

HO-3, called the “special” form, insures your home and detached structures against loss or damage from any peril except for those specifically excluded in the policy. This is the policy most homeowners purchase. It is important for you to read your policy carefully to see what is excluded—you may want to cover exclusions with special endorsements.

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A simplified guide for buyers of Virginia Beach real estate.

 To a home loan shopper, there may seem to be an endless–and confusing–array of mortgage types. Of course you want to choose the option that is best suited to your current and future financial situation, but understanding the terminology, types, and monetary ramifications is not always easy. Mortgages generally fall into four categories (fixed rate, adjustable rate, step, and balloon) according to the interest rate and duration of the loan.

Basic terminology;

    Fixed rate–The interest rates do not change during the life of the loan, thus allowing you to know the amount of your payments.

    Adjustable rate (ARM)–the interest rate is tied to certain indexes plus a margin and can fluctuate up or down, thus affecting each payment,

    Step–the interest rate and monthly payment remain the same for a specified period of time. After that the interest will change to the prevailing rate and will remain there for the duration of the loan.

    Balloon–a loan payment that expands after a certain amount of time. Basically it functions similarly to a fixed rate mortgage in the earlier months/years with a delayed steep increase at the end.

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A simplified guide for painless purchasing of your Virginia Beach home.

Part I of this three-part series dealt with analyzing your financial situation, getting prior loan approval, and determining your real needs/desires in a first home. All that having been accomplished, you will now want to look for a mortgage and decide which is the most advantageous for you.

As with any major purchase, you will want to shop around for the best deal. Contact several lenders (bank, savings and loan, credit union, private mortgage company, or a state or federal government lender.) Before doing that, however, you need to familiarize yourself mortgage types, terminology, and options. Your real estate agent will be helpful in this mission, as will the internet. Keying in First-time house buyers, mortgage assistance, HUD, or Community Housing Partners, will result in innumerable informative sites, a wealth of information for you to consider, and, most likely, a list of questions for you to ask your realtor and/or potential lender.

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RE/MAX Chief Executive Officer, Margaret Kelly, talks about the government’s extension/expansion of the first-time homebuyer tax credit. Certain existing home owners can now qualify for the credit and homebuyers have until April 30, 2010 to put a contract on a house.

Don’t wait for next year’s tax refund. Give us call to learn how to use your tax credit towards your down payment and closing costs.

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Many Virginia Beach renters are finding that they get more ‘bang for their’ buck if they buy a home rather than rent one. With affordable prices, low interest rates and tax incentives, Virginia Beach home ownership makes more sense than ever. 

7 Reasons To Buy Rather Than Rent Virginia Beach Home

1. Buying doesn’t always cost more.
The Associated Press reports the gap between buying and renting has decreased $550 in the last three years.

2. Affordability is at an all-time high.
Nationwide, prices have declined by nearly 20-40%.

3. Tax benefits for home ownership saves money.
The biggest tax break is the mortgage interest deduction. Most of your mortgage payment goes to interest which is tax deductible. Property taxes and mortgage insurance are also tax deductible.

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The current economic climate has created an extremely competitive market for Virginia Beach home sellers. High inventories and the abundance of deals on foreclosures puts to pressure on Virginia Beach home sellers to have properties in showing condition and to be priced right. Many sellers want to initially price their property on the high end of the market and underestimate the costs of having a property sit on the market unsold. Maintenance costs, taxes and insurance are ongoing. Another thing to consider is the benefits of having invested the money that can be made with a fast sale vs. the cost of sitting on the market for a long period of time. 

The saying ‘time is money’ is never more true than when selling a Virginia Beach home, For example,

In January, you put your property on the market for $500,000. In February, your agent recommends a price reduction of $10,000 to $490,000, but you decide to wait out the market a little longer. Assuming your monthly payment on the property is $4,000-5,000 per month (including mortgage, property taxes, and insurance), and it hasn’t sold in six months, by June you have spent $24,000-30,000. This $30,000 expense has lowered the property value from $500,000 to $470,000. If you had lowered the selling price in February to $490,000 and obtained a faster sale, you would have had ended up with more money in your pocket. 

Virginia Beach property values recently have been declining 5-10 percent a month. A property that might have sold in January or February for $490,000, will most likely only sell for $440,000-465,000 in June. So how do you sell your Virginia Beach home faster and for more money? 

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