With home prices falling, this will allow some buyers to take advantage of a price range of homes that may have previously fallen into the JUMBO loan category, which were at higher interest rates.

In some areas, it may be possible to buy a home under $400,000 using an FHA loan product that had previously sold for over $500,000 or more at the peak of the housing bubble.  Consider this:

2006 Home price $525,000.  $475,000 Jumbo Loan at 6.75%  Principal and Interest payment $3080.

2009 Home Price $395,000   $365,000 FHA Loan at 5.0%  Principal and Interest payment $1959

This is a savings of $1121 per month on THE SAME HOUSE!!!

There are documented cases in some areas in this price range of houses selling for these types of discounts over the peaks in 2005 & 2006.  Not all of these are trashed foreclosures either!  Call me to find out more.  651-485-0055

If you are a homeowner in distress with keeping up with your mortgage payments, or perhaps are in foreclosure, beware!

The latest scam to hit the mortgage scene are individuals or companies who claim they will help you “modify” or “work out” your loan terms with your lender(s).

While a few of these services may provide some value, most individuals don’t need outside assistance to get help modifying your mortgage.  All lenders & mortgage loan servicing companies have a “work out” department that you can contact and inquire about the process for modifying your loan.  You can call the customer service number on your statement and ask for the department that handles loan modifications.  They will likely direct you to a website where you can download an application package, or they will offer to mail you one.

When deciding if you will qualify for a loan modification, a lender needs to know that the adjusted loan terms will fit your budget, and it will help you stay in your home long term.  They will not modify your loan for you if they see it as only a temporary solution and they would likely end up foreclosing anyway. 

Types of Modifications can include:

• Lowering the Interest rate
• Lengthening the loan term
• Forgiving late payments (and sometimes adding them back on end of loan)
• Reducing Principal Amount (Rare-and the subject of a lot of legislative debate right now!)

If you decide you need help in obtaining a modification, and you decide it is too overwhelming to attempt on your own and need help, only work with someone who:

• Does not charge an upfront fee
• Has documented references/success stories from other homeowners
• Is in good standing with the State (the attorney general is actively prosecuting some of these services right now)

Most importantly, DON’T sign anything that resembles a deed or a purchase agreement that would transfer any ownership in your home to one of these companies, without getting an opinion from a disinterested party like myself on the fairness to you of that offer.

Loan modification is an unregulated/unlicensed industry.  If you or someone you know needs help, call me first, and I’ll help!    If loan modification is not an option, I can also help them attempt to sell the home and negotiate with the lenders for a short sale, and avoid foreclosure   Pete 651-485-0055  pete@soldbypete.com

(See these posts)

http://blog.soldbypete.com/2008/10/24/pete-aplikowski-is-now-a-certified-distressed-property-expert/

http://blog.soldbypete.com/2008/10/24/10-reasons-why-a-short-sale-is-better-than-a-foreclosure/

See below info for Tax Credit Updates…

MOST IMPORTANT-YOU CAN TAKE THE CREDIT ON YOUR 2008 TAXES IF YOU BUY A HOME IN 2009.  IF YOU ALREADY FILED YOU CAN FILE AN AMENDED RETURN AND GET THE MONEY AS SOON AS YOU CLOSE ON YOUR NEW HOME.

(always consult a qualified tax professional before making any tax-related decisions)

—————-

Posted by Jamie Downey February 24, 2009 07:45 AM -Boston.com

I am proud to serve on the board of the Shoreview Community Foundation.  This organization was started in 2008 by a group of community leaders.  Individuals interested in making a donation or finding out more, can visit the website at http:www.shoreviewcommunityfoundation.org.

Mission Statement

The Shoreview Community Foundation seeks to maintain, enhance and enrich the quality of life in Shoreview, Minnesota.

Focus

Serving as a source for long-term charitable giving by maintaining knowledge of the needs, desires and resources within Shoreview.

Assuring donors their gifts will have the greatest community-wide benefit while remaining true to their designated wishes.

Facilitating a process for Shoreview residents and friends to make donations to specific charitable causes in Shoreview.

Grant Considerations

Arts and cultural organizations.

Recreational places such as parks and trails, as well as places for reflection and relaxation such as open space, wetland, and woodlands.

Community educational initiatives, enhancements and leadership development.

Historical preservation.

Social and Human Services.

President Obama was on the news announcing he is directing Treasury to direct employers to lower the federal tax withholding deducted from employee’s paychecks in an effort to get more money into the economy.

While putting money in the hands of consumers NOW is truly a “stimulus”, this plan is only going to work if taxes are also reduced, so that people don’t owe this money back in April 2010.    One thing consumers should know is that you don’t need the government to adjust your withholding.  You can file a new w-4 form with your employer at any time to adjust the number of deductions you take, which will affect the level of taxes withheld from your paycheck.  If you, as a taxpayer, get a tax refund year after year, you have been giving the US Treasury an interest free loan for the preceding year.  If you want to maximize your purchasing and investing power, you should try to adjust your withholding so that you get a minimal tax refund, or even owe a minimal amount at tax time.

If you are buying a home in 2009 and can take advantage of the new $8000 tax credit, you should definitely consider adjusting your withholding so you can see some of that money in 2009, not 2010.  See this post for more info.

Always get professional tax advice from a qualified individual before making any tax related decisions for yourself or your family.

Bank of America executives indicate restrictions in the new mortgage/housing initiative may do little to help people because of government restrictions.

Click here to read article at Bloomberg.com: Worldwide

Part of the 2009 American Recovery & Reinvestment Act (ARRA) are modifications to last year’s $7500 first time home buyer tax credit.  I did not write/post about the prior tax credit because I personally thought it was a lot of smoke and mirrors, and did not really offer true “immediate” help to the housing crisis, because it saddled buyers with the obligation to pay back the money, and if they sold the property in the short term the money had to be paid back at time of sale.  This really did not help anybody achieve an increased equity stake in homes, which is one of the main housing problems today.  I also did not notice any “uptick” in activity of first time home buyers when the previous bill was announced in 2008, further proof that the general public wasn’t buying it.

SEE UPDATED BLOG ENTRY HERE

The 2 main modifications in the new bill are:

1)  The money does not now have to be repaid!  (The 2008 version was basically a $7500 interest free loan, payable at 0% interest over 15 years back to the US Treasury starting 2 years after the year you took the credit.

2) The tax credit is increased to $8000, and extended to December 31st, 2009.  Just as in the previous bill, there are income limits and some restrictions.  To qualify as a first time buyer, you cannot have taken a home mortgage interest deduction in the preceding 3 tax years, so you cannot have taken a home mortgage interest deduction in 2006, 2007 or 2008. To take advantage of this tax credit, you must purchase a home in the 2009 calendar year, and the credit would not apply until you file your 2009 tax return.   Herein lies part of the “stimulus” dilemma…read on…

How to buy a home in 2009 and get “Immediate” tax relief

If you buy a home in 2009, are a W-2 employee, and your employer withholds your taxes out of your paycheck, you will not “feel” the effect of this “stimulus” until you receive your 2009 tax refund (in early 2010).   I know first hand from the hundreds of families that I have helped purchase homes that the most “expensive” period of new home ownership is the first year.  This is the period when you make all the trips to Menard’s, Home Depot, Lowe’s, Wal-Mart, Target, (insert store of your choice) to purchase all the things (window treatments, appliances, shelving, paint, carpet, etc..) you need to settle into your new home.  This infusion of cash into consumer’s lives is what our economy needs!

IT HAS BEEN CLARIFEID YOU CAN TAKE THE DEDUCTION ON YOUR 2008 TAXES!  READ ABOUT IT HERE

Consider This!

While I am not qualified to give tax advice, if you buy a home in 2009 consider the following.  Consult a tax professional to make sure you qualify for the ARRA tax credit, and then go to your employer and submit a new W-4 form to maximize (or minimize, depending on your point of view) your allowable (claimed) deductions, so that less federal tax is withheld from your paycheck.  This will give you immediate “tax relief” in the form of more money in your bank account each pay period. 

There are some details to yet be worked on the plan, and even the IRS.gov site is not yet updated about ARRA specifics.   I will post more specifics as I learn them, and before you make any decisions, please consult a qualified, knowledgeable tax professional.

Foreclosure, Home Buyers | No Comments » October 24th, 2008