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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A simplified guide for painless purchasing of your Virginia Beach home

Okay, you’ve made your lists of: must have” and “would be nice” features, and you’ve identified desirable neighborhoods with the schools and amenities that meet your needs. Now it’s time to seriously shop for your first-time Virginia Beach home.

Before you even step outside to begin the search, your agent will email to you listings which meet your criteria, and you can “visit” many of them online via a virtual tour. Once you have narrowed down your choices, your agent will arrange for you to look at–in person– your selected properties. A few bits of advice here:

1) Take notes on each home you tour. Too often individual details blur after you’ve seen four (or more) houses in a day.

2) Look past the owner’s furnishings and décor. Concentrate on the features you have identified as important and try to picture yourself actually living in the space.

3) If you have decided that you don’t need a “move-in ready” residence, look at the potential of the property. Would simple cosmetic changes make a considerable difference?

4) Listen to both your head and your heart. Sometimes a property really does “speak” to you, and you know you have found your new home.

Now it’s time to make an offer! Your agent will provide you with comparable prices (comps) of similar homes which have recently sold in the neighborhood to help you decide how much you are willing to offer. He/she will prepare a contract which will include price; amount of down payment and deposit (earnest money); your financing arrangements; inspection rights; conveyance of any appliances, window treatments, furnishings, etc.; the settlement date; and any contingencies you might want to add.

Once your agent presents you offer to the seller, negotiations may begin. The seller may counter your offered price or any other part of the contract, and you may, in turn, counter such requests. You may have to offer more money in price, but you can also ask the seller to cover all or some of your closing costs or to make repairs that ordinarily would not be covered. The best solution, of course, is to reach an agreement that makes both the buyer and the seller happy. A word of caution here: it is easy to get caught up in the excitement of buying your first Virginia Beach home and in the negotiation process itself. Stop often for a reality check. Don’t get so personally involved that you lose sight of what you really want–or can afford! Occasionally you may have to walk away from a potential deal, but keep in mind that there are hundreds more homes from which to choose.

More often than not, however, the deal is finalized, and you will quickly proceed to having a home inspection, a HVAC inspection, and an environmental test (asbestos, mold, radon). Your agent can arrange for these important inspections to ensure that the property meets expected standards. He/she will also deal with the seller to take care of any exposed discrepancies and/or unexpected problems

What‘s next? Preparation for your closing, a walk-through of the property, and then the actual settlement! Watch this space for the final installment of thus series.

Basic Steps for First-time Virginia Beach Home Buyers – PART II

Basic Steps for First-time Virginia Beach Home Buyers – Part 1

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

Congratulations! So you’ve made the decision to stop renting and purchase a place of your own. The home buying process may initially appear complicated and a bit daunting, but by using the skills of a buyer’s real estate agent, searching the internet, and familiarizing yourself with each of the steps involved, your experience can be a smooth and rewarding one.

1. Analyzing your financial situation.

The first thing to do is to learn how much you can afford to pay for your Virginia Beach home. Generally speaking, mortgage costs, or PITI (principal, interest, taxes, and insurance), should not exceed 26-28% of your gross monthly income. Many internet web sites furnish free tools for calculating these expenses for you. Remember that in addition to income, your credit rating, on-going monthly expenses, amount of the down payment, and the current interest rate must be factored into your financial analysis. Also take into consideration any HOA’s (homeowners’ association) dues, maintenance costs, and utilities you’ll have to pay on a monthly basis. You would be wise to investigate state and federal government programs which help qualifying first-time buyers with down payments and closing costs. Visit the U.S. Department of Housing and Urban Development website for specific information which could be quite beneficial to you.

2. Getting prior loan approval.

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The $8000 first-time home buyer tax credit was scheduled to expire in just a few short weeks…Nov 30, 2009. I say ‘was’, because the Senate voted unanimously to extend the credit on Monday and the House of Representatives approved the extension yesterday afternoon by a vote of 403-12. The extension includes an expanded tax credit to repeat home buyers. The bill now goes to the President for his signature which is expected to happen today.

 Home Buyer Tax Credit Expansion and Extension 

1. The $8,000 tax credit will be extended and available for first-time home buyers through May 1, 2010.
2. A new $6,500 tax credit will be available for repeat buyers who purchase between December 1, 2009, and May 1, 2010. To qualify, buyers must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.
3. Prospective buyers with binding contracts in place as of April 30, 2010, will be allowed an additional 60 days to complete the transaction.
4. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
5. Limitation on the cost of a purchased home is $800,000. 

If you know anyone looking to buy their first Virginia beach home at a time when prices and interest rates are at 5 year lows, or if you are thinking of buying another Virginia beach home and getting the new $6,500 credit please contact me today.

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VHDA’s (Virginia Housing Development Authority) new Homebuyer Tax Credit Plus Program will allow first-time home buyers to use their anticipated $8,000 tax credit for down payment and closing costs.

Homebuyer Tax Credit Plus Details 

The Homebuyer Tax Credit Plus is a combined second mortgage with a VHDA FHA insured first mortgage. The second mortgage can be up to 5% of sales price or appraised value, which ever is less.  No interest and no payments are due on the second mortgage for the first 12 months of the loan.  This provides the homebuyer sufficient time to receive their federal first-time homebuyer tax credit and use it to repay the loan with no costs or penalty. If the second mortgage is not fully repaid during the first 12 months, the balance will be amortized over the remaining 29 years at the same interest rate as the first mortgage.  If partial repayment is made to the second mortgage during the first 12 months, the loan will be re-amortized at the lower balance for the final 29 years. This will result in a lower monthly payment on the second mortgage.

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The recently encacted “American Recovery and Reinvestment Act of 2009,” provides an $8000 tax credit for first-time Virginia Beach home buyers. Below are the highlights of the legislation:

Important Facts To Know:  

• It is a tax credit to home buyers, not a loan as in last year’s program;

• It is only for first time home buyers, defined as someone who has not had an ownership interest in a principle residence in the 3 year period prior to the date of the 2009 purchase;

• The buyer must remain in the home for a minimum of 3 years. If not, the credit is recaptured at upon the sale of the home. 

• It is applicable to purchases between January 1, 2009 and December 1, 2009; and

• Full credit is available to those with adjusted gross income of $75,000 or less ($150,000 for married filing jointly). The credit is phased out entirely for those with adjusted gross income over $95,000 ($170,000 for married filing jointly).

If you bought a home last year under the old $7,500 tax credit rules, those rules still apply to your 2008 home purchase.
 

If you purchased a home after January 1, 2009, or are thinking of buying a Virginia Beach home this year and want to learn more about the $8,000 tax credit, give me a call or visit ButlerTeamHomes.com. We are happy to advise you as to how you can benefit from the tax credit.

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Virginia Beach First-Time Home Buyers Have Loan Options

There is so much negative press about the lending industry these days, many Virginia Beach first time home buyers are scared to death to even consider buying a home. They hear stories that someone’s mortgage payment went from $1,000 to $1,800 almost overnight. They are afraid of the fine print and don’t know who they can trust. 

Subprime loans are loans to borrowers with questionable credit, usually 680 credit score or lower, and at higher interest rates.  

Virginia Beach first time home buyers have other, less scary, mortgage options:

Virginia Housing Development Authority

Virginia offers first-time home buyer loan through the Virginia Housing Development Authority (VHDA). Current offerings include: 

First Choice: Zero downpayment and 25% less monthly payments 

Step Rate: Interest rates are reduced for the first two years. 

Flex Advantage: Financing up to 104% including closing costs. 

If you are a Virginia Beach first time home buyer and need more information on sound, reliable financing options, visit ButlerTeamHomes.com. You can also give me a call for more personal assistance. 

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