My friend did an 80/20 loan when she bought her house and didn’t have to put any money down, how can I get one of those? Two years ago in the mortgage lending world, there were many programs that allowed borrowers to max out the value of the property with low down payments. What lender’s found is that Real Estate, like any other investment, can be subject to fluctuations in value. If you loan someone 100% of the value of their property and that value drops, you could be left holding the bag.
Now, most lenders’ require some type of down payment, except for limited programs for Veteran’s and first time buyers. In most cases, you will need to have at least a modest (3.5%-5% down payment) in order to qualify to purchase a home. Credit scores have also become a more important part of the qualification process. If your credit score is below 680, you may need to put up to 20% down, unless the property will qualify for an FHA or First Time homebuyer’s program.
To find out all of your options, make sure that you are dealing with a mortgage banker. They will have access to more programs and be able to talk with you in detail about all of your options.
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
Saturday, February 27, 2010
Tuesday, February 23, 2010
Homebuyer's Tax Credit
http://knoxvilleneighbors.blogspot.com
What is all the information I keep hearing about a Homebuyer Tax Credit? Currently two tax credits exist for home buyers. They are filed through the IRS with your 2009 Taxes, or as an amended return.
The first is a tax credit for First Time Homebuyers. This credit allows you to receive up to 10% of the purchase price (up to $8,000) when you purchase a home. This blog is not designed to qualify you for the credit, but to give you basic information. You must not have owned a home that was your primary residence within the last 3 years. You cannot use the credit to buy a home from a close relative (parent, grandparent, spouse, or child), or when you inherit a home. You cannot use the tax credit if you are married, and your spouse has owned a home in the last three years. Your individual income cannot exceed $125,000 and joint returns cannot exceed $225,000. This really is a great deal for first time buyers.
The second credit is probably less understood and applies to Long Term Homeowners. It is available to homeowner’s who have lived in a house that is their principle residence for at least 5 of the last eight years. You do not have to own a home currently, but you cannot have been in the home for less than 5 years, or vacated the home more than 3 years ago. If it has been more than three years since you owned a home, you should qualify for the First Time Homebuyer’s Tax Credit above, subject to income limitations. The credit is up to $6,500 and like the first time buyers credit is refunded to you through the IRS.
To qualify for either credit, you must go ahead and purchase a home. The deadline to have a contract is April 30th 2010, and you must close within 60 days of the contract. After you have closed, you will use the HUD-1 Settlement Statement from your closing to file for the Tax Credit through the IRS. If you owe money to the IRS, that is going to be paid from any tax credit that is due to you.
Now is a great time to be looking as a buyer. Rates are low and inventory is available. If I can assist you with financing for your new home, don’t hesitate to contact me.
For more information on credit issues go to:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
What is all the information I keep hearing about a Homebuyer Tax Credit? Currently two tax credits exist for home buyers. They are filed through the IRS with your 2009 Taxes, or as an amended return.
The first is a tax credit for First Time Homebuyers. This credit allows you to receive up to 10% of the purchase price (up to $8,000) when you purchase a home. This blog is not designed to qualify you for the credit, but to give you basic information. You must not have owned a home that was your primary residence within the last 3 years. You cannot use the credit to buy a home from a close relative (parent, grandparent, spouse, or child), or when you inherit a home. You cannot use the tax credit if you are married, and your spouse has owned a home in the last three years. Your individual income cannot exceed $125,000 and joint returns cannot exceed $225,000. This really is a great deal for first time buyers.
The second credit is probably less understood and applies to Long Term Homeowners. It is available to homeowner’s who have lived in a house that is their principle residence for at least 5 of the last eight years. You do not have to own a home currently, but you cannot have been in the home for less than 5 years, or vacated the home more than 3 years ago. If it has been more than three years since you owned a home, you should qualify for the First Time Homebuyer’s Tax Credit above, subject to income limitations. The credit is up to $6,500 and like the first time buyers credit is refunded to you through the IRS.
To qualify for either credit, you must go ahead and purchase a home. The deadline to have a contract is April 30th 2010, and you must close within 60 days of the contract. After you have closed, you will use the HUD-1 Settlement Statement from your closing to file for the Tax Credit through the IRS. If you owe money to the IRS, that is going to be paid from any tax credit that is due to you.
Now is a great time to be looking as a buyer. Rates are low and inventory is available. If I can assist you with financing for your new home, don’t hesitate to contact me.
For more information on credit issues go to:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
Monday, February 8, 2010
Helping Your Children Establish Credit
It is important that your kids establish and learn to manage their credit early. Credit scores affect the ability to get a loan, the cost of insurance, and can even be important in obtaining employment.
So, how do you help your child establish credit? One of the first things is to make them an authorized user on one or two of your credit cards. As an authorized user, that credit will begin to report in their name also. It is not necessary to give them a card, but giving them a card with a low limit can help them learn financial responsibility be giving them responsibility for coming up with the money to pay the bill.
Always make sure that the bill is paid on time, and don’t allow the card to be paid late to “teach” them a lesson. Allowing them to miss payments, will lower their credit and start them out on the wrong foot.
Be careful when co-signing for your children. In most cases, you will not receive the monthly statements and your attempt to help teach them financial responsibility, could actually hurt your credit. When you find out that they are in trouble, it may be too late. If your credit is affected also; it could take months or years to repair.
For more information on credit issues go to:
www.experian.com
www.transunion.com
www.equifax.com
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
So, how do you help your child establish credit? One of the first things is to make them an authorized user on one or two of your credit cards. As an authorized user, that credit will begin to report in their name also. It is not necessary to give them a card, but giving them a card with a low limit can help them learn financial responsibility be giving them responsibility for coming up with the money to pay the bill.
Always make sure that the bill is paid on time, and don’t allow the card to be paid late to “teach” them a lesson. Allowing them to miss payments, will lower their credit and start them out on the wrong foot.
Be careful when co-signing for your children. In most cases, you will not receive the monthly statements and your attempt to help teach them financial responsibility, could actually hurt your credit. When you find out that they are in trouble, it may be too late. If your credit is affected also; it could take months or years to repair.
For more information on credit issues go to:
www.experian.com
www.transunion.com
www.equifax.com
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
Monday, February 1, 2010
Maintaining Your Credit Through a Divorce
http://knoxvilleneighbors.blogspot.com/
While going through a divorce, the last thing on your mind is how it will affect your credit. Your attorney takes the responsibility for making sure that you are legally separated from your spouse. That involves a separation of debt and assets. Typically a judge will issue the final decree and the final divorce document lists the items that you are responsible for, and those that are delegated to your spouse.
While future lenders will use the final divorce decree to eliminate those debts assigned to your ex-spouse from your debt to income ratio, the divorce decree does not protect your credit.
At the time that you applied for joint loans (while you were married) creditors relied on both of you to approve the credit card, car loan, or home mortgage that you received. The divorce decree cannot set aside the creditors right to come after you to recover un-paid debt obtained before you were divorced. Should your ex-spouse fail to make payments on time, or default totally on the loan, this information will be reported on your credit and could affect your credit score for years to come.
So what should I do? Always seek to pay off and close any joint account. Tell your attorney that failure on the part of your ex-spouse to pay their obligations after the divorce could affect your credit. Make your spouse sell, or refinance any items that cannot be paid off; while this may force them to adjust their lifestyle to their current income, it will prevent you from being reported for poor payment history.
I have heard that closing accounts could lower my credit score, is that true? Yes, closing accounts could lower your score, but not nearly as much as finding out a year later that your ex-spouse didn’t make any payments and you owe thousands of dollars in outstanding balances.
If the divorce was particularly bitter, continue to check your credit regularly over the next several years. Your ex-spouse knows more about you than most people. It would not be difficult for them to fraudulently open new accounts in your name. Most credit agencies will allow you to put an alert on your account that requires a phone call to you before new credit is issued.
For more information on credit issues go to:
www.experian.com
www.transunion.com
www.equifax.com
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
While going through a divorce, the last thing on your mind is how it will affect your credit. Your attorney takes the responsibility for making sure that you are legally separated from your spouse. That involves a separation of debt and assets. Typically a judge will issue the final decree and the final divorce document lists the items that you are responsible for, and those that are delegated to your spouse.
While future lenders will use the final divorce decree to eliminate those debts assigned to your ex-spouse from your debt to income ratio, the divorce decree does not protect your credit.
At the time that you applied for joint loans (while you were married) creditors relied on both of you to approve the credit card, car loan, or home mortgage that you received. The divorce decree cannot set aside the creditors right to come after you to recover un-paid debt obtained before you were divorced. Should your ex-spouse fail to make payments on time, or default totally on the loan, this information will be reported on your credit and could affect your credit score for years to come.
So what should I do? Always seek to pay off and close any joint account. Tell your attorney that failure on the part of your ex-spouse to pay their obligations after the divorce could affect your credit. Make your spouse sell, or refinance any items that cannot be paid off; while this may force them to adjust their lifestyle to their current income, it will prevent you from being reported for poor payment history.
I have heard that closing accounts could lower my credit score, is that true? Yes, closing accounts could lower your score, but not nearly as much as finding out a year later that your ex-spouse didn’t make any payments and you owe thousands of dollars in outstanding balances.
If the divorce was particularly bitter, continue to check your credit regularly over the next several years. Your ex-spouse knows more about you than most people. It would not be difficult for them to fraudulently open new accounts in your name. Most credit agencies will allow you to put an alert on your account that requires a phone call to you before new credit is issued.
For more information on credit issues go to:
www.experian.com
www.transunion.com
www.equifax.com
This blog is for informational purposes and is the opinion of the writer. In financial matters always solicit professional advice and legal counsel if necessary.
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