Do Your Part To Help Economy

Do Your Part To Help Economy: Take Some of the Government Hand Outs, Lower Your Mortgage Payments or Buy a New House.

Our government is giving away tax dollars in an effort to stop home depreciation and help the economy. Here is a summary of how to get some of these tax dollars in your pocket while helping the faltering economy. Falling real estate values are killing the Nation’s financial institutions, not to mention damaging the stock market and to the equity in your home. Take advantage of the $787 Billion Stimulus Package and the $75 Billion Treasury’s “Making Home Affordable” Programs and help stop the bleeding. Here is a quick summary of how you can help:

1. Refinance Now: The US Treasury has been buying mortgage backed securities at an unprecedented rate. This has lowered fixed mortgage rates to the low 5% range. This, combined with the new, higher loan limits of $625,000 has helped many to lower their mortgage payments. If your loan amount exceeds $625,000 or if you are over 80% loan to value, consider paying down the mortgage to meet the lender’s guidelines. Remember, if you reduce debt costing you 6%, you are guaranteed to earn that rate of interest on your investment.

2. Get your first time homebuyer $8000 tax credit[1] when you buy a home before December 1st 2009. A “first time home buyer” is anyone who has not owned a home for three years. If you plan to buy before the deadline, you can begin saving by reducing your withholdings now. The law also allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates and can be applied by filing 2008 returns instead of for 2009 returns. Income must be lower than $75,000 for individuals and $150,000 for couples. If you already own a home and have a twenty something year-old living in your house, give them a push! Now is the time to pick up a steal!

3. The Home Affordable Refinance[2]: This program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. This program is aimed at homeowners whose loan to value is greater than 80% and do not qualify for a traditional refinance. These borrowers may be eligible to refinance their loan and take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan. The Home Affordable Refinance program ends in June 2010. Only homeowners in good standing whose loans are held by Fannie Mae or Freddie Mac qualify. The property must be owner-occupied and the borrower must have enough income to make payments on the new mortgage debt. Borrowers can't owe more than 105 percent of their home's current value on their first mortgage. Borrowers with a second mortgage still can qualify as long as their first mortgage isn't more than 105 percent of their home's value. Homeowners can't take cash out during the refinancing to pay other debt.

4. The Home Affordable Modification[3]: This program will help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments. Who can qualify? The program applies to mortgages made on Jan. 1 or earlier. If your mortgage payment including taxes, insurance and homeowners association dues exceeds 31 percent of your gross monthly income you may qualify for modification. The property must be the homeowner's primary residence. Home loans for single-family properties that are worth more than $759,750 don't qualify. Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years! You do not need to be behind on your mortgage to qualify for this program.

5. Mortgage Analysis: Need help to figure it out? Call for a free mortgage analysis. 703-821-5554



[1] http://www.federalhousingtaxcredit.com/
[2] http://www.treas.gov/press/releases/reports/guidelines_summary.pdf
[3] http://www.treas.gov/press/releases/reports/guidelines_summary.pdf