Buy or Refinance Your Virginia Beach Home NOW!!

1.  Home Buyer Credit Act

• DEADLINE: April 30, 2010 (June 30^th with a signed, binding contract).
• ELIGIBILITY: First-time buyers and repeat buyers (those who have owned and lived in one residence for 5 consecutive years of the last 8).
• INCOME LEVELS; $125,000 individual and $225,000 for couples.
• PURPOSE Allows Virginia Beach home buyers to receive a tax credit (which may be claimed on this year’s taxes) of $6500 to $8,000.

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

2. Home Affordable Refinance Program (HARP)

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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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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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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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There has been much confusion in the last couple of weeks concerning the $8,000 first-time home buyer tax credit being used toward your down payment when buying Virginia Beach real estate. HUD announced tax credit monies could be used for the down payment. Then a week later HUD rescinded the offer. Now it is back…with conditions.

HUD has confirmed that the $8,000 tax credit can be used toward the down payment on FHA loans, but cannot replace the required 3.5% minimum. In other words, you still must put 3.5% down, but can then use the tax credit for additional down payment or for closing costs. You make use of the tax credit money by means of a bridge loan.

Some state housing finance agencieshave developed their own tax credit bridge loan programs, so buyers can monetize the tax credit upfront to cover all or part of theirdown payment. These programs are separate from the HUD program.

Give ua a call to learn how you can use your $8,000 tax credit to your best advantage when buying Virginia Beach real estate!

Learn more aobut Virginia Beach real estate at ButlerTeamHomes.com.

Realtors learned a hard lesson this week. Just because HUD puts information out there, doesn’t mean it will happen. Last week we wrote about HUD allowing the $8,000 tax credit to be used for a down payment, Use $8000 Tax Credit As Downpayment For Your Virginia Beach Home.

HUD has now rescinded their Mortgagee Letter 9-15 which allowed tax credit loans. They are apparently analyzing the issues with it. It has now been retracted, and the letter removed from the HUD site.  At this point it’s no longer there.. Here is why…

In regards to FHA loans, a borrower can only obtain monies for their actual downpayment of 3.5% by the following :

• Their own funds
• up to 100% of a gift from a relative/family member
• From the Federal, state, and local governmental agencies and nonprofit instrumentalities of government
• FHA approved non-profits 
• monies from their employer in a form of employee contribution
• monies from secured borrowed funds… IE. borrowing equity from your home to buy another home or borrowing against your car that is free and clear or borrowing from your 401-k, etc.

While the $8000 first-time home buyer tax credit has been a good thing for Virginia Beach home buyers – it just got better!!

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, has announced the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.

What does this mean for Virginia Beach home buyers? First time home buyers will not have to wait to file their tax return to get the $8000 and will be able to use these funds when they close on their home loans so that the cash can be used as a downpayment. FHA approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans, allowing eligible home buyers to access the funds immediately at the closing table.

This is GREAT news for first-time home buyers who often are tight on cash when purchaing a home. Give us a call today to learn how to take advantage of your $8000 credit.

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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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It’s official! The $8,000 tax credit for first-time Virginia Beach homebuyers was signed into law yesterday by President Obama.

It is not the $15,000 credit that was proposed by the House of Representatives, but it is a definite improvement over the $7,500 low interest loan that was in last fall’s legislation. Who qualifies:

First-time Virginia Beach homebuyers who purchase this calendar year get an $8,000 tax credit which does not have to be repaid like a similar measure last year. This phases out for people making more than $75,000 individually or $150,000 jointly. “First-time homebuyer” is defined as someone who has not owned a home for the past three years.

The purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Applying for the credit will be easy – or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

This legislation does not help the first-time Greenville homebuyer who doesn’t have the cash for a down payment as you have to have closed the deal to qualify. It is more of an $8,000 discount on the price of the home and can give home buyers a cushion for unexpected costs during the first years of homeownership.

Are you a first-time Virginia Beach homebuyer? Give me a call! I am glad to discuss how this new law effects you personally.

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