Philadelphia Area Mortgage Blog

This information on the $8000 Tax Credit for First Time Buyers was originally posted on my mortgage information blog.  I know the tax credit is generating a lot of inquiries so I am reposting the information here. This is a great incentive for those who may be looking to buy, but are still on the fence. 

If you are in the market to buy your first home you may be able to take advantage of a new federal tax credit for first time homebuyers.  Here are some facts about the tax credit:

• The tax credit is for first-time home buyers only, a first-time buyer is defined as someone who has not owned a home in the past three years .
• The tax credit does not have to be repaid. This is a change from last year's tax credit which was basically an interest-free loan, repaid over 15 years.
• The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.   So someone purchasing a $60,000 home would only receive a $6,000 credit, while someone purchasing a $300,000 home would only receive the $8,000 maximum.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with modified adjusted gross incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.  Those with incomes over that amount may still qualify for a partial tax credit.

As you can see this is a great incentive for those who are considering purchasing a home this year, but are unsure if now is the right time to take the path to homeownership.  For more reasons why 2009 may be a great time to buy,  please read:

Why 2009 is the Time to Buy

Why 2009 is the Time to Buy - Part 2

Remember, before you even begin to look at houses you should contact a mortgage professional to get pre-approved for a loan,  so that you will be sure you qualify and so you will know exactly how much home you can afford. 

Please contact us with any questions or to get started today.

Information courtesy of Pennsylvania Mortgage Professional Michelle Chamberlain.  For more mortgage related information visit www.mortgage411center.com.  For information of small business loan alternatives visit www.ezmerchantadvance.com.

Many homeowners today are finding themselves in a situation where they can no longer afford to pay their mortgage.  Perhaps they lost their job or because of the economy their income has been greatly reduced.  Perhaps they had an adjustable rate mortgage and could no longer afford to make the payments once their interest rate increased.  Or perhaps they simply bought more home than they were realistically able to afford.   If you are a homeowner in this situation, where should you turn? 

In my opinion there are a lot of folks out there that are in over their heads and may not be able to keep their homes no matter how hard they try.  However, I also think there are a lot of homeowners who can be helped, but they just do not know who to contact or what to do. To read more about the different options available if you can no longer afford your home click here. 

Written by Michelle Chamberlain

Homeowners who would like more information on mortgages please visit www.mortgage411center.com

Business owners who like information on small business loan alternatives visit www.ezmerchantadvance.com.

No matter what your political persuasion, I don't think you can deny the power of the graph posted above.  Just wondering, who is going to make whole all the shareholders that lost their savings and retirement money in the stock market.  Why stop at bailing out homeowners who have lost equity? Will we be bailing out 401(k) plans next?

Next time, Keep the Change

I have a lot to say about the President's new plan to help homeowners who can no longer afford their home.  I am sure I will have even more to say once the full details of the plan are released.  This was originally posted on my own mortgage information blog but I am reposting it here.  Plus, I really like this bumper sticker. 

Via www.mortgage411center.com

On March 4, 2009 the complete details of the Homeowner Affordability and Stability Plan will be released. I have previously expressed my opinion on the plan, based on what has already been publicized, particularly objecting to the incentives and rewards included in the program to both banks and homeowners.  Though, this plan is predicted to help between 7 and 9 million homeowners keep their home, through low interest refinances, loan modifications, and even principal reductions, The President stated in his televised speech last week that the program will only be available to help "responsible borrowers". Though this statement was met with a round of applause  in the audience, it of course leads to the following question: Exactly who are the responsible borrowers?

First some facts:

1) It is estimated that about 93% of Americans are not behind on their mortgages. So this plan is geared toward only 7% of the population.

2) According to the fact sheet: This is a "new program that will provide the opportunity for 4 to 5 million responsible homeowners who took out conforming loans owned or guaranteed by Freddie Mac and Fannie Mae to refinance through the two institutions over time".

3) There are lenders and companies that are already successful in getting loans modified for homeowners without the intervention of the government and do not leave tax payers responsible with the tab.

My main problem with the plan is that the government should not be involved in the business decisions of banks and lending institutions and that the true responsible homeowners (the 93% who are not behind on their payments) should not be footing the bill.   However, that is only a matter of opinion.  The fact of the matter is that those who may truly need assistance may not be able to get it, and those who did make bad decisions may still be able to get bailed out. 

As stated above the President's new program is only available to homeowners with loans owned or guaranteed by Freddie Mac and Fannie Mae. Now I don't expect the average homeowner to understand the significance of that statement, and I would guess that our government doesn't really understand it either. However, the fact that the program is only limited to loans guaranteed by those two institutions means that that there will be no help to borrowers who have non-conforming loans also known as subprime mortgages.  Subprime mortgages were often given to borrowers with credit problems and carried higher interest rates.  While one can make the argument that perhaps these borrowers should not be helped out, one must also note that there are many cases of borrowers who were placed into so-called subprime mortgages when they really could have qualified for a conforming loan.   It has also been stated that the reason it is important to prevent foreclosures, is that even borrowers who are able to pay their mortgage suffer when foreclosures in their neighborhood cause declining home values.   Yet, this program does nothing to offer assistance to borrowers that perhaps have a much greater risk of facing foreclosure, which seems a little contradictory .

Furthermore, I notice that the statement equates Fannie Mae and Freddie Mac loans with responsible borrowers and conforming loans. This is misleading as well. A loan can still be considered "conforming" yet still be a stated income, low down payment or an adjustable rate mortgage. That is, it is entirely possible that a borrower who has a conforming mortgage was not really "responsible" and bought more home than he could afford.

As you can see determing the "responsible borrowers" is not as easy as the government's plan makes it out to be. However, even if we are operating on the assumption that only borrowers with conforming loans should be able to take advantage of the program, should all conforming borrowers be classified as responsible? Should a person who lost his job and wants to continue to collect unemployment checks be included as part of the responsible borrowers simply because he as a Fannie Mae loan? Should the Realtor or Mortgage Loan Officer whose income greatly dropped because of the economy yet refused to get a part-time job to make ends meet be helped out as well? What about those who took the path to homeownership even though they had no savings to rely on or emergency funds set aside in case the they lost their jobs or income?

Which leads me to wonder, why the sudden government interest in helping "responsible" people anyway.  Should we now overlook the fact the foreclosure problem in the housing market was caused in part by the government insisting that banks make loans to less than qualified borrowers?  Should we all be picking up the tab for other people bad luck or bad decisions?   One thing is certain, we are probably going to see a lot more of these bumper stickers going around:

You can get your sticker too at www.tngop.org

A few weeks ago I sent an email to US Senator Arlen Specter letting him know that I opposed the massive spending bill that was about to be voted on in Congress.  Specter was one of three Republican Senators who was considering voting for the bill and being a resident of Pennsylvania, the state which he represents, I wanted to let him know that I opposed this bill and that he should as well.  Today I finally received a response back from the Senator.  Here it is:

Dear Mrs. Chamberlain:

As a senior member of the Appropriations Subcommittees on Foreign Operations and Defense, I have been uniquely engaged in foreign affairs while serving in the U.S. Senate. The 110th Congress is faced with many important international issues: the reconstruction of Iraq, the spread of nuclear technology, state sponsorship of terrorism, human rights, and global epidemics. To examine the challenges faced by the U.S. internationally, I have traveled extensively and entered into dialogue with the leaders of friendly and adversarial countries alike. My experience has led me to the conclusion that active engagement, open dialogue, and the strategic use of America's position on the United Nations Security Council is critical to achieving international peace and security.

With respect to our foreign aid budget, I believe it is important for the U.S. to give valuable assistance overseas while keeping with our national interests. On December 18, 2007, I joined many of my Senate colleagues in writing to President Bush, to urge that in Fiscal Year (FY) 2009 the Administration's continue its past efforts to increase U.S. investment in the International Affairs Account.

I supported the FY08 Foreign Operations Bill. This measure included $1.03 billion for the Migration and Refugee Assistance account, with $45 million designated specifically for the Emergency Refugee and Migration Assistance Fund, a funding level that reflects America's fundamental commitment to helping those who have been forced to flee their native countries. I also supported the inclusion of $1.56 billion in funding for the Millennium Challenge Account, an innovative foreign assistance initiative that provides assistance to countries committed to pursuing healthy political and economic policies. Additionally, the bill included an important contribution of $550 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria.

I believe that a U.S. emphasis on international diplomacy and development is critical to achieving global security. Rest assured that I will continue to advocate for dialogue with the international community and robust funding for vital U.S. international assistance programs.

Thank you again for contacting me. The concerns of my constituents are of great importance to me, and I rely on you and other Pennsylvanians to inform me of your views. Should you have any further questions, please do not hesitate to contact my office or visit my website at http://specter.senate.gov.

                                                           Sincerely,

Arlen Specter  

Honestly, do you think that whoever took the time to send me this canned response could have at least bothered to address my concern?  Could they at least have read it and pretended to care? Needless to say, guess who I will NOT be voting for next election?

Written by Pennsylvania Mortgage Professional Michelle Chamberlain

For mortgage information visit www.mortgage411center.com and www.aboveallmortgage.com.

For small business financing visit www.ezmerchantadvance.com.