Friday, November 27, 2009

Understanding Title Insurance

A policy of title insurance is a contract of indemnity between the insured and the insuring company relating to the title to the land described in the policy, protecting the insured against loss of damage by reason of defects, liens or encumbrances of the insured title existing at the date of the policy and not expressly excepted from its coverage.

The policy is issued after a complete search and examination of the public records and shows the condition of the record title, including any money obligations outstanding against the property, easements and other matters which may affect the rights of ownership, possession and use of the property.

Title insurance protects the "record" title, insuring it is good subject only to the exceptions expressly set out in the policy. lt also insures against certain matters which do not appear of record, such as forgery, identity of parties, incompetence of former owners, interest of missing heirs, and status of individuals not having the "right" to sell property.

There are many different types of policies. Owners policies are issued to real estate owners. Purchasers policies are issued to purchasers of real estate under contract. Mortgage policies are issued to mortgage companies. In addition there are several other special forms of policies. There is a type of policy to meet the requirements of almost any form of real estate transaction.

Click here to read more about title insurance and other home buyer tips.

Tuesday, November 17, 2009

Economy Headed Toward Recovery

Thanks to the success of home buyer tax credit to date, the outlook for housing and the economy appears to be headed toward recovery.

Executives from some of the largest brokerages in the country expect to see their sales grow 6-8 percent in 2010 and home prices to start heading up about 3 percent. Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0% over last year, and then are forecast to rise 13.6% to 5.69 million in 2010.

It is expected that the expansion of the tax credit to include repeat buyers will help boost middle-market sales for next year. The improvement in the middle market will help tighten inventories, helping to shore up prices.

It looks as though we have seen the worst of it!

Friday, November 13, 2009

How to Get the Extended Home Buyer Tax Credit

So, you’ve decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here is what you will have to do to get your benefit:
  1. Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract by April 30, 2010 and close by July 1, 2010.

  2. Decide whether you are going to:
  • apply the credit to your 2009 tax return, filed on or before April 15, 2010;
  • file an amended 2009 return;
  • or, apply the credit on your 2010 return, filed on or before April 15, 2011.

3. Attach documentation of purchase to your return.

Documentation of Purchase

Details concerning the precise documents required to confirm your purchase have not yet been released. When this information becomes available, I will include instructions and links to the appropriate forms.

When to Apply the Credit

Buyers purchasing homes on or before December 31, 2009 may claim the credit on their 2009 tax returns. Buyers purchasing in 2010 will have the option to:

  • Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;
  • File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
  • Claim the credit on their 2010 tax returns.

If you purchased a home between January 1, 2009 and November 6, 2009, please see: How to Get the 2009 First-Time Home Buyer Tax Credit.

Applying the Credit to Your 2009 Taxes

You will need to do three things to claim the credit on your 2009 tax return:

  1. Fill out Form 5405 to determine the amount of your available credit;
  2. Apply the credit when you file your 2009 tax return or file an amended return;
  3. Attach documentation of purchase to your return or amended return.

Sunday, November 8, 2009

New Carbon Monoxide & Smoke Detector Law for Maine

This is important if you know someone who:
1. Plans to acquire or sell a rental property
2. Currently has an investment property
3. Is the tenant in a rental property

Effective November 1, 2009, single family and multifamily properties are required to have working smoke detectors and carbon monoxide detectors. This includes single family homes that are occupied under the terms of a rental agreement or month-to-month tenancy.

All transfers of property after October 31, 2009, must be certified to the buyer at closing by the seller that the property provides smoke detectors and carbon monoxide detectors in accordance with the law.

Click here for more information regarding this new law.

Extended Home Buyer Tax Credit Common Questions

Who Qualifies for the Extended Credit?
First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.

Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:
  • The price of the home
  • The buyer's income


Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Click here to compare the 2009 tax credit with the newly passed version.

Friday, November 6, 2009

$8,000 Home Buyer Tax Credit Has Been Extended!!!

Legislation has been passed to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they've lived in their home for five of the past eight years.

Home prices are capped at $800,000. The legislation in both houses was included in a bill to extend unemployment benefits and is expected to be signed by President Obama shortly.

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.

Click here to compare the current tax credit with the newly passed version.

Monday, November 2, 2009

Looking For 100% Financing with No Money Down?

Are you ready to own a home but are not sure you will qualify due to lack of a down payment?
Rural Development may be able to help you!

USDA Rural Development has offers 100% financing opportunities to rural individuals and families with:

  • No down payment required
  • No expensive monthly mortgage insurance (which means you may qualify for a larger loan)
  • Flexible credit and qualifying guidelines
  • No maximum purchase price limit
  • Closing costs can come from any source including gifts or the seller
  • Repairs and improvements can be included in the loan
  • Competitive fixed 30-year rates.

So, if you have been thinking about taking advantage of the $8000 Home Buyer Tax Credit, but do not have the money for a down payment and closing costs, think again!

The Rural Development guaranteed loan program has assisted thousands of home buyers customers just like you. It is definitely worth looking into!

Click here for more information and check out my website for more home buying tips!