Archive for June, 2009

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Rising Interest Rates are Good News for Everyone

June 17, 2009

Rising interest rates can affect both buyers and sellers.  Although you wouldn’t think it, rising interest rates can be good news for everyone in Tangipahoa Parish.

Rising Interest Rates – Good News For Sellers

    * When mortgage interest rates rise, buyers get motivated to buy (Citigroup).
    * When buyers get motivated to buy, home values stabilize.
    * When home values stabilize, home prices increase with activity.

Rising Interest Rates  – Good News For Buyers

    * When interest rates rise, buyers hear the wake up call: Now is the time to buy to get the most house for the money.  Higher interest rates affect buying power.
    * When interest rates rise, buyers hear the wake-up call: Now is the time to buy to avoid a higher mortgage payment later.  Higher interest rates increase the required mortgage payment for the same loan amount.
    * When interest rates rise, buyers hear the wake-up call: Now is the time to buy so that qualifying for a loan will be easier.  Higher interest rates affect income ratios.

Rising Interest Rates – Good News For Everyone

    * Rising interest rates are an indication that the credit crisis is easing (Times.com).
    * Rising interest rates are an indication that better economic times are ahead.
    * Rising interest rates are an indication that the recession is easy and things are improving (Economic Cycle Research Institute).

Rising interest rates never make consumers happy.  But after all the gloomy recent economic news, maybe it’s time to accentuate the positive.  Corporate America and the banks are faring better, as indicated by the improvement of the yield curve between Treasury Bills and Bonds.  This curve is what causes interest rates to rise and fall.  If rising interest rates are an indication that our economy is improving, then it is good news for everyone.

Yvonne Martin, The Martin Team, your Hammond real estate specialists

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Hammond Homeownership Fair

June 10, 2009

The National Association of Realtors has designated June as National Homeownership Month.  Hammond’s Mayor, Mayson Foster, is a believer in the benefits of homeownership and has organized the Hammond Homeownership Fair.

Date: June 27th
Place: Hammond City Council Chambers (312 E. Charles St.)
Time: 12pm – 5pm

The event is free and open to all.

The focus of the Hammond Homeownership Fair is to emphasize how to become a homeowner.  The Hammond Homeownership Fair will provide you with information, resources and assistance.  Mortgage lenders, real estate agents and other real estate related industry representatives will be on hand for advice and to answer questions, all at no obligation.

Hammond has received funds from the American Dream Down Payment Initiative to help prospective buyers meet the minimum down payment requirements for a mortgage loan.  Lenders will be on hand to explain the program.

Homeownership Fair Highlights will include:

    * Mortgage Loans
    * Down Payment Assistance Programs
    * Applying the Tax Credit
    * Credit Counseling
    * Home Insurance

My next blog will feature the benefits of home ownership.

Yvonne Martin, the Martin Team, Let my family bring your family home

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First-Time Buyers Rejoice-Tax Credit and Tax Deductions Await

June 3, 2009

First-time buyers in Tangipahoa Parish can rejoice with a tax credit that is better than a tax deduction.  As a matter of fact, first-time buyers will be allowed to take advantage of both a tax credit and a tax deduction.  But this will only be available this year and only for a short time.

Tax Credit and Tax Deduction:

    * A tax credit is subtracted from the amount of money you owe at tax time, resulting in a dollar-for-dollar savings.
    * A tax deduction is subtracted from your gross income.
    * A $1000 tax credit will reduce the amount of money you owe by $1000.  If you owe less than $1,000, you get the balance in the form of a refund.
    * A $1,000 tax deduction will decrease the tax owe you owe by about $10.

First-time Home Buyers Tax Credit Applies to 2009 Only:

    * First-time home buyers can take advantage of a tax credit when they buy a home this year.  But, be aware that the tax credit will end on December 1, 2009.  The escrow on a home purchase must close no later than November 30.
    * First-time home buyers are eligible for a tax credit up to $8,000 (or 10% of the purchase price).
    * First-time home buyers can tax advantage of the tax credit in two ways:

  • As a tax credit when they file their 2009 tax return.
  • As a supplemental down payment and/or help to pay closing costs.  This applies to FHA loans only.

First-Time Buyer Tax Credit Advantages:

    * Need less funds to close when financing a home through the FHA loan program.
    * Owe less money to the IRS when filing 2009 tax returns.
    * If elect to use the tax credit for a supplemental down payment or loan costs but do not need the full tax credit, the balance will be applied to your 2009 tax filing or will be refunded to you.

New Homeowners Tax Deduction:

    * All new homeowners are allowed an important tax deduction, which is often overlooked.
    * New homeowners can deduct any points paid when they purchased their home.
    * This is a one-time tax deduction and can only be applied to the year the home was purchased.
    * You must have a Form 1098 from your lender.

Homeowners Tax Deduction:

    * All homeowners can take advantage of this tax deduction.
    * There is no expiration or time limit.
    * Homeowners are allowed the benefit of deducting the interest paid (in the previous year) when filing their tax returns.
    * You must have a Form 1098 from your lender.

The real purpose of this blog is to let first-time home buyers know that there is a reason to rejoice when buying a home in 2009.  Buyers will certainly rejoice in their pride of ownership and their sense of accomplishment but they will be able to rejoice when taking advantage of the tax credit and tax deductions that await them.

Caveats:

    * The tax credit is for this year only and will soon be disappearing.
    * When filing taxes, it is always best to consult a professional tax consultant.
    * Consult with an FHA-approved lender for information on how to apply the tax credit when using FHA financing.

Yvonne Martin, the Martin Team, Let Our Family Bring Your Family Home