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Making the Monthly Mortgage Payment

What??? How can that be? Well, it’s all in the numbers. This is a headline similar to nearly all of the news stories we read throughout 2008/2009 regarding our mortgage crisis.

So how in the world can 40% of the nation’s homeowners NOT make an on-time mortgage payment last month? Well, it’s simple. What I haven’t mentioned yet is that according to the US Census Bureau’s American Housing Survey released in late 2008, approximately 34% of American Homeowners own their home “free and clear” with no mortgage payment due… Hmmm.

The rest of the puzzle? According to the Mortgage Bankers Association, the percentage of mortgage payments that were ‘late’ in late 2009 was around 9.34% (which equates to about 6.36% of homeowners). So there you have it; 34% who made NO mortgage payment (thus the statement is true regarding NOT making an on-time mortgage payment… or ANY mortgage payment) plus the other 6% equals 40%.

Now please keep in mind that 44% of the nation’s foreclosures last year were concentrated in just FOUR states; California, Arizona, Nevada, and Florida. Here in Nebraska, the percentage of loans in foreclosure late last year was among the lowest in the nation, only 4.13%!

For years, according to Transunion, the delinquency rate on mortgages has been about 2%, it just recently increased to 9% in the third quarter of last year. What did we hear? We heard that the delinquency rate QUADRUPLED. We didn’t hear that 91% of mortgages are being paid on time. That wouldn’t make headlines!

We can all debate as to WHY the news gets reported the way it does, especially in the last two years. I guess it comes down to the old adage; “If it bleeds, it leads”. I firmly believe that the skewed reporting of exactly how ‘bad’ the news supposedly was in the last two years struck fear into all homeowners, and to the detriment of the nation’s real estate industry, all potential home buyers over the last two years. They reported, people reacted, they reported the reaction, people reacted again. Etc… I believe that the headline grabbing over-dramatic reporting of the ‘crisis’ elevated the ‘crisis’ tenfold.

It reminds me of a story I heard about an old Indian Chief and a local Weather Service office:

The Indian Chief thought that he’d better start preparing for winter so he sent all the braves out to collect wood. As he watched them return laden with timber from the forest he suddenly felt that he ought to check his forecast so he phoned the local weather office.”Tell me, is it going to be a bad winter?”"Yes” said the forecaster “It will be a bad one”

So the Chief told the braves that they didn’t have enough wood and sent them back into the forest again. They returned with more wood but once again the Chief had doubts and he called the forecaster to confirm.”It is going to be a really severe winter” replied the forecaster.

The Chief look at the wood supply, decided that more was required and the braves were dispatched back in to forest. The Chief called the forecaster.”Are you sure it’s going to be a really severe winter”"Look” said the forecaster “It’s definitely going to be the worst winter on record – the Indians are gathering wood like crazy!”"

Am I naïve enough to really think that if things were reported differently we’d all be holding hands singing Kumbaya? Of course not! I do beleive that the ‘crisis’ would have been a whole lot less severe had they reported the facts differently.

There is still a lot of Real Estate activity going on in Omaha Nebraska! It is an absolutely GREAT time to buy right now. There is plenty of incentive with the two TAX CREDITS that are available. There is also the fact that FHA is getting ready to change the rules AGAIN and make it more difficult for the first time buyers to get into a home. I would urge you to act now if you are an FHA buyer.

I still have some clients that are ‘waiting’ for the bottom of the market before they make their move. The fact of the matter is that I believe the bottom of the market is now passed us up. That’s the funny thing about the bottom of the market, you never know it was here until it’s gone. My advice is to get out there and buy your home this spring! You’ll be glad you did.

Bill Swanson is an agent with over 20 years experience helping buyers and sellers in the Omaha metro area. CBSHome Real Estate is an affiliate of Berkshire Hathaway. You can contact Bill at Bill.Swanson@CBSHome.com

CBSHOME Real Estate has partnered with David Knox, a top sales trainer and keynote real estate speaker, to bring you more information regarding the Extended Home Buyer Tax Credit(s) that are currently available.

Please enjoy this video and contact a CBSHOME Real Estate sales associate to begin your home search today!

 Attached is a short video that was provided by RealtorTV. This article explains the new tax credit law in a simple and easy to understand video. Take three minutes of your time and click on the link below. There are other articles that you can browse through if you like. If you have questions I can be reached by text/cell at 402-490-1646 or email at larygaver@gmail.com. Would enjoy hearing your questions/comments.  Maybe “NOW” is the time to buy!!

Tax Credit Video

REALTORS® Leann & Scott Yahnke will hold a meeting about the extended & expanded Home Buyer Tax Credit program at 7PM on Thursday, Dec. 10th at the CBSHOME offices at 3705 N. 147th St., Ste. 200. There is no cost to attend the meeting, but registration is required. To register, call Scott at (402) 657-3333.

In our contacts with people, we have discovered that at least two-thirds of those we’ve talked with about the recently extended & expanded tax credit program have a very unclear understanding of it. In particular, existing homeowners (who have owned & lived in their present home for at least 5 consecutive years of the past 8 years) are largely unaware of either the opportunity to get a $6500 tax credit on the purchase of another home or the specific criteria to be followed in order to earn the credit. [NOTE:  One vital fact about the credit for existing homeowners is that their next home purchase does not have to be of greater value than their present home.]

***Any readers of this posting who are existing homeowners considering having a new home built & who have not gotten started with this process should definitely attend this meeting, as your time frame is growing shorter with each day’s passing.

Along with informing existing homeowners of the details of this U.S. Government-approved program, we also welcome prospective first-time buyers & prospective buyers who have not owned a home for at least 3 years, who are eligible for an $8000 tax credit, to attend this meeting.

A friendly atmosphere & accurate information are among our highest & best services. Hope to see you there! Feel free to inform anyone you know about our meeting, & if you or they cannot attend the meeting, please call Scott at 657-3333 for answers to your questions.

Look for an announcement about our meeting in the Saturday, Dec. 5th edition of the Omaha World-Herald in its “Community Connections” section!  

Congress has extended the expansion of the $8,000 tax credit until next June 30 replacing the old deadline of November 30^th.

But here’s something in the expanded program that hasn’t gotten much attention: The new $6,500 federal tax credit for so-called “move up” buyers took effect immediately upon enactment.

That means that potentially hundreds of thousands of Americans who fit the key ownership and income criteria for the new credit are eligible for it … right now.

What are those tests?

• You have to have owned and used your current home as your principal residence for five consecutive years out the past eight.
• Your adjusted household annual income cannot exceed $125,000 if you file taxes as a single, or $225,000 if you are married filing jointly.
• You must sign a contract to purchase a replacement residence before next April 30, and go to closing on it by June 30, 2010.

Although the $6,500 feature has been labeled the “move up” credit, there is nothing in the law forcing anybody to buy a bigger or costlier house. You can downsize or upsize and still get the credit.

This new condition or, rather lack thereof, not only will stimulate more activity in the market but it just may help families choose the most appropriate price range for their families budget, which is better for everyone in the long run.

If you would like more information about how the tax credit can help you in your next home purchase email bill.swanson@cbshome.com.

NAR Frequently Asked Questions

Homebuyer Tax Credit Changes

National Association of REALTORS® Government Affairs Division

500 New Jersey Avenue, NW, Washington DC, 20001

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

Only 45 days left to make offer, negotiate, and take your dream home to closing. November 30th is the magic day, however Thanksgiving weekend falls inline with the deadline so you should really be closing on the 23rd or 24th to avoid potential delays and forfeiting your $8000 tax credit! Make sure you are being represented by a buyers agent that has a proven full time record. This is no time to settle for anything less.

Ready to buy a home? Lets talk! I can show you any home, Call Kevin Kermeen (402) 426-8250

Time is running out for homebuyers, who must close by November 30, 2009. The government’s $8,000 tax credit for first-time homebuyers has been extremely successful, but time is running out to capitalize on this unique opportunity.

The tax credit, available for first-time homebuyers, as well as to individuals who have not owned a principal residence in the 3-year period prior to purchase, expires November 30, 2009. That means that home loans closed past that date will not qualify.

Since it generally takes a couple of weeks to negotiate a purchase, then 30 to 45 days to close on a loan – with more stringent appraisal and disclosure requirements adding more time to the closing process – it is crucial that those wanting to take advantage of the incentive realistically select a home by mid-October to meet the deadline.

“This incentive has brought the dream of homeownership to literally thousands of individuals and families,” said Ron Peltier, chairman and CEO of HomeServices of America, “but time is running out, and there are not guarantees at this point that congress will extend the program.”

“New homeowners have accounted for approximately one-third of recent home purchases,” adds Larry Melichar, CEO and President of CBSHOME Real Estate, “so clearly the program has been wildly successful. But like all good things, there is an end, so don’t miss a chance to take advantage of this once-in-a-lifetime opportunity.”

The tax credit is available for homes purchased before December 1, 2009. Single-family, townhomes, or condominiums qualify for the tax credit, provided that the home is used as the principal residence. This also includes new construction homes if occupied by December 1, 2009. The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

This new tax credit can help ease the transition and help cover the new expenses that come with home ownership. The tax credit does not have to be repaid, as long as buyers stay in their new home for at least three years after purchase. IRS Form 5405 gives all the details and as always, consult with your personal tax advisor.

For more information, contact CBSHOME Real Estate at 402-964-4600 or www.cbshome.com.

About HomeServices of America: HomeServices of America, Inc. based in Minneapolis, Minn., is the second-largest homeownership service provider in the United States. Owned by MidAmerican Energy Holdings Company, an affiliate of Berkshire Hathaway Inc., HomeServices’ operating companies offer integrated real estate services, including brokerage services, mortgage originations, title and closing services, property and casualty insurance, home warranties and other homeownership services. HomeServices Relocation, LLC is the full-service relocation arm of HomeServices of America which provides every aspect of domestic and international relocation to corporations around the world. HomeServices operates in 20 states under the following residential real estate brand names: Carol Jones REALTORS; CBSHOME Real Estate; Champion Realty Inc.; Edina Realty; EWM REALTORS; Harry Norman, REALTORS; HOME Real Estate; Huff Realty; Iowa Realty; Koenig & Strey GMAC Real Estate; Long Companies; Prudential California Realty; Prudential Carolinas Realty; Prudential First Realty; Prudential York Simpson Underwood Realty; RealtySouth; Rector-Hayden REALTORS; Reece & Nichols; Roberts Brothers Inc.; Semonin REALTORS and Woods Bros. Realty. Information about HomeServices and the locations of its subsidiary companies is available at www.homeservices.com.