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People who have lost their homes through foreclosure (or short sales) or who have restructured their mortgage loans may qualify for tax relief under a new tax law, the Mortgage Forgiveness Debt Relief Act of 2007. Highlights of Mortgage Debt Relief: You may exclude up to $2 million of debt forgiven or canceled by a mortgage lender on a main home. Both mortgage restrucuring and foreclosures qualify Now available for the years 2007 through 2012. For more information, go to The Mortgage Forgiveness Debt Relief Act and Debt Cancellation .

If you are a First-Time Home Buyer and purchase a home before December 1, 2009 you can take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit: Close on your home purchase by November 30, 2009, Ensure that you are a qualified first-time buyer under IRS guidelines, Decide which year to file under, 2008 or 2009, File an amended 2008 return or choose to apply the credit to your 2009 tax return. Deciding When to Apply the Credit If you want the benefits of your credit as soon as possible: You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return. If you anticipate a drop in income next year: You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly

What is FHA Mortgage Insurance? The Federal Housing Administration (FHA) insures mortgages offered by banks, savings associations, and other financial institutions. An FHA-insured mortgage is backed by the full faith and credit of the United States government. While FHA does not make loans, it benefits the homebuyer by providing mortgage insurance which encourages financial institutions to make affordable financing available. What Are the Benefits of an FHA Mortgage? FHA offers low down payment options, eligibility with less than perfect credit, a loan at a reasonable cost, and help if there is ever trouble making the mortgage payment. Because an FHA mortgage insures the lender against loss, an FHA mortgage typically has an interest rate that is competitive with the best in your market and lower than the rates charged for subprime and other non-prime mortgages. FHA is designed to help people buy a home and to help them keep it. In return for protecting lenders against loss, FHA require

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income. 2. Develop your home wish list. Then, prioritize the features on your list. 3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety. 4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price. 5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments. 6. Determine your mo

If you haven’t owned your own home in the past 3 years, you may qualify for MaineHousing’s Gift of Green . For a limited time, MaineHousing is offering eligible borrowers who use a MaineHousing mortgage: Up to $5,000 (not to exceed 4% of the mortgage amount) to help with the cash needed for closing, such as any required down payment, closing costs, and prepaids. A coupon worth up to $500 for a 2-part home energy audit. The Gift of Green is a gift, which will not be added to the loan amount, and it never has to be paid back . Because the Gift of Green promotion is part of MaineHousing’s mortgage program, you also may be able to use the Purchase Plus Improvement Option to fund home energy improvements as part of your mortgage. MaineHousing mortgages even come with payment protection for unemployment . Total Financial Incentives of Up To $15,000! Add the Gift of Green grant of up to $5,500 to the federal First-Time Homebuyer Tax Credit worth up to $8,000. This, in turn, lets you invest

A friendly reminder for you first-time home buyers out there... In order to qualify for the government’s $8,000 gift in the form of a tax credit, your deal must close by Dec. 1, 2009. It's not too late! You should have a purchase contract signed by early October, so you have 45 to 60 days to arrange financing and safely close the deal. For more information on the First-Time Home Buyer $8000 Tax Credit, click here .

Before a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone. Here’s why: Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home. Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World. Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent. Home owners can itemize. That opens up opportunities to deduct a host of other ite

If you follow my blog, you are well aware of the fact that the first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now, both legislators and the business community are hoping to build on the incentive's success by expanding it! A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes are: Setting a new cap of $15,000 Extending the tax break into mid-2010 Making the benefit available to all home buyers, not just first-timers Offering a separate tax credit to $3,000 for borrowers who refinance Let's keep our fingers crossed! These proposed changes will benefit many home buyers and really stimulate the real estate market!

The Pending Home Sales Index , a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5. Economists are saying that buyers are responding to very favorable market conditions. Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market. Since first-time buyers must finalize their purchase by November 30 to get the credit, increased activity is expected in the months ahead Geographic Breakdown: Northeast: The Pending Home Sales Index shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. Midwest: The index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. South: The index slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. West: The index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008. There are numerous buyer a

On May 14, 2009, the Obama Administration announced its Foreclosure Alternatives Program (FAP) providing incentives and uniform procedures for short sales and deeds-in-lieu of foreclosure under the Making Home Affordable Program. The Making Home Affordable Program is designed to help homeowners obtain modifications to their loan so they can afford to stay in their home. Where a modification is not possible, new incentives encourage a quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future. A uniform process for handling short sales and financial incentives should help facilitate this process. Click here to view a summary of the incentives and process.