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.

What Are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Those in the military do have some special extensions on the time lines available.

What’s So Great About a “Tax Credit”?
The benefit of a tax credit is that it’s a dollar-for-dollar benefit, rather than a “tax deduction”, or reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time home buyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the home buyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time home buyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a Virginia Beach home with a maximum sales price of $800,000.

It’s also important to note another upcoming deadline as the Federal Reserve winds down a program that has been keeping home loan rates artificially low. The fact is that the lowest rates of 2009 were driven down to their attractive levels because of the Fed’s Mortgage Backed Securities (MBS) purchase program, which the Fed once again emphasized in its January 27, 2010 Rate and Policy Statement will end on March 31, 2010. As the Fed’s program winds down and ends, rates could rise over time since MBS will have less support from the Fed.

If you have any questions regarding the tax credit, pick up the phone and call me. I’m here to help you take advantage of one of the greatest opportunities Virginia Beach home buyers may ever have.

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

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.

The next step, before you ever begin actually looking a home, is to secure pre-approval for a loan. In order to do this, you will need to provide a potential lender with all necessary information about your finances. Your buyer’s realtor will help you do this.

After performing a thorough and positive analysis of your financial situation, the lender will issue you a letter of approval which states the amount for which you qualify. This letter assures buyers that you are guaranteed a sufficient loan and that they are guaranteed a sale with no unpleasant surprises.

3. Determining your needs and desires.

If you are relocating to Virginia Beach, you will certainly want to familiarize yourself with the area–in person or via the net. Virginia Beach offers condos, townhouses, duplexes, small, medium and large detached homes, and very large, impressive residences. You can locate near the Atlantic Ocean, the Chesapeake Bay, a navel base, farmland, or the city center. Think about the type of community you’d feel most comfortable in. Older and established? Brand new and shiny? Consider age, style, and size you’d prefer. Would a fixer-upper be a good match for you? Is proximity to good schools important? What about the distance to and from your workplace? Traffic patterns and noise? Ample (and reserved?) parking? Do the community amenities suit your lifestyle? Do you want neighbors nearby?

Make lists for yourself. What are your “must haves”? Where do you want laundry facilities? Is an updated kitchen essential? Do you prefer an open floor plan? Who will maintain a large yard? Prioritize your wants and needs and revise the list when necessary.

As a first-time Virginia Beach home buyer, you’ll learn that you’ll have to make some compromises and that the whole process can be time-consuming–but oh, so exciting! Rely on your buyers’ real estate agent to advise you about the advantages/disadvantages of specific locations and house styles and help you through the loan approval step. Because of his/her access to the Multiple Listing Service (MLS), he or she can search, with your wish list in hand, through thousands of listings to find the “ideal” Virginia Beach home for you.

Watch this space for more simplified steps…

 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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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.

Homebuyer Tax Credit Plus Eligibility Details

Borrowers must meet VHDA’s mortgage revenue bond First-time homebuyer program guidelines including income and sales price limits. Borrowers must also meet Federal first-time Homebuyer Tax Credit requirements.  As a part of the Federal First-time Homebuyer Tax Credit requirements – all loans must close by November 30, 2009.

VHDA Maximum Mortgage/Minimum Borrower Funds

Like the FHA Plus program, the borrower must obtain a maximum VHDA FHA first mortgage.  The second mortgage must be no more than 5% of the lesser of sales price or appraised value – not to exceed funds required by the borrower for downpayment, closing costs, prepaids and discount points.  Borrower cannot borrow funds in excess of what is needed for closing.  Borrower must have the equivalent of 1% of the sales price documented as their own funds in the transaction or in reserves.  POC items paid by credit cards may not be reimbursed to borrower at closing.

Give us a call for more information of this incredible financing for first-time home buyers!

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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