Is It Time to Refinance?

Recent action by the Fed has interest rates on 30 year fixed rate mortgages being right around 5% and in some cases (depending on your credit score) even lower.

These are the lowest rates we’ve seen in over 35 years.  With that being said, I believe everyone should consider refinancing their homes.

I purchased my house about a year and a half ago at 6% and recently locked in at 4.85%…it will take me about two years to recoup the closing costs associated with the refi, but I will immediately be saving a little over $100 per month on my mortgage.  Note, my loan amount is just under $200K, the higher the loan amount, the more money you save.

There are a couple of ways to benefit:

1. First, know both your current mortgage rate and current refinancing rates (and associated costs like closing attorney fees, appraisal fees, etc.). Generally, if the current rates are at least 1% lower than your current interest rate on your mortgage.
2. If you have an adjustable rate mortgage think about locking it in for a longer term at today’s low rates, among the lowest in the last 25 years. Or if you know you will be moving in the next few years, think about locking in a lower rate 5 year adjustable mortgage.
3. If you have lots of expensive credit card debt or second and third mortgage debt, consider paying it off with a new first mortgage that puts all your debt in one low-rate long-term obligation.

To get these advantages, you’ll generally have to have good credit, be current on payments,  and the value of your house must be above the amount of the mortgage.

To determine if refinancing is right for you, ask yourself these two questions:

• How long do you plan to stay in the house or how long do you plan to own the house?
• What are the costs associated with the refinance and how many months of money saved from refinancing will it take to cover these costs?

These questions will help determine the length of time it will take to actually realize the savings.  Generally speaking though, the immediate savings is worth it even if it takes 1-3 years to “break even” because houses tend to appreciate.

Send your friends a link to this article, they’ll be glad you did because everyone could use some more money in their pocket which will help our economy and then we all benefit!

Possibly Related Posts:

• Georgia Rides to the Capitol
• First-time Homebuyer Tax Credit
• New Program Modifies Mortgages to Help Stabilize the Real Estate Market
• Mortgage Rate Update – Week of October 13, 2008

Georgia Rides to the Capitol

March 3, 2009
12:00 am	to	11:40 am

W H O

Metro Atlanta Mayors Association (MAMA), Georgia Bikes!, and event sponsors will host over 1,000 cyclists from the metro Atlanta region. Police-escorted rides will depart from Decatur and Roswell led respectively by Mayor Bill Floyd and Mayor Jere Wood as well as other mayors and public officials from the region.

W H A T

During the fourth annual “Georgia Rides to the Capitol” event, cyclists will embark on rides to the Capitol in order to raise support for improved conditions for cycling, including the development of regional systems of both on-road bicycling facilities and multi-use-trails.

W H E N

Tuesday, March 3, 2009, during the state legislative session. Estimated time of arrival at the Capitol is 11:40 a.m. Your starting time will depend on which city or auxiliary location you choose to start at or which route you choose to join along the way.

W H Y

Riding to raise support for the development of a regional-scale bicycle network of both on-road facilities and multi-use-trails, and cycling connections to major transit facilities, activity centers, and schools.

MAMA also intends to raise awareness of the benefits of bicycling as an important form of transportation; a beneficial economic development and tourism tool; an excellent way to maintain health and fitness; and a great sport and family activity.

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First-time Homebuyer Tax Credit

Yes, the economy is in the dumps, but if you disregard the media’s portrayal of the current housing forecast you will see that it is actually quite favorable for homebuyers…especially “first-time homebuyers”.  While housing prices may continue to drop, mortgage rates are at historical lows and there are plenty of government programs to help first time homebuyers.

Last fall, the government passed a bill which provides a tax credit of $7,500 to first-time homebuyers.

Although this is not new news, there have been many crazy variations of what the $7,500 tax credit means to you.  As your Roswell Realtor and also a licensed CPA, I do feel that we need to clear this up.

1. The tax credit is not free money, but is actually a zero interest loan for 15 years.  This means that you do indeed have to pay back the “loan”, but you can save a lot of money on interest payments.
2. Under the legislation,  a first-time homebuyer is defined as anyone who hasn’t owned a home as their principal residence in the last three years. It is important to note this distinction as you may not have thought you qualified if you weren’t a real first-time homebuyer.
3. The first-time homebuyer criteria applies to both spouses if married.
4. The closing date of the house must fall between April 9, 2008, and June 30, 2009.
5. Your modified adjusted gross income (MAGI), which is all of your income on your tax return before taking deductions must not exceed $75,000 for singles and $150,000 for married taxpayers.
6. You are required to pay back the loan, but have two years after applying for the tax credit before you must start to make payments.  You can also repay the loan from the profit of reselling the home, if you choose to sell within 15 years.  If you do not make a profit on the sale, the remaining tax credit loan is forgiven.  Otherwise, the tax credit loan is due within 15 years in annual payments.
7. You do not have to claim a full $7,500 tax credit. And you can only claim the full $7,500 if you buy a home for $75,000 or more. Homes worth less than $75,000 will qualify for a tax credit of 10% of the purchase price.
8. Since this tax credit is refundable (you can receive it as a tax refund after filing your federal tax return), the immediate advantage is what you can do with it.So here’s my tip and the reason you’ve read this far – if you’re thinking about buying a home in the next few months, wait to file your tax return until the day after you close, so you can claim it against your 2008 tax return. Tip #2 – don’t forget to file an extension if this means you would file after April 19.
9. Consult a tax professional for the finer details of the tax credit.

A poor economy does not mean it is not a good time to buy a home, actually it is quite the opposite.  This is a great time for buying a home if you have a steady, secure job, and a good credit score.

There are a lot of great Roswell neighborhoods. Whether you’re looking for Roswell new construction, a “certified, pre-owned” home or perhaps a townhome or condo, there is a great selection currently available to choose from.

Click here for an up-to-date list of Roswell homes for sale.

If you have more questions about the tax credit or just wondering if now is the time to start looking for your home, contact us and we’ll be glad to help you.

Possibly Related Posts:

• Is It Time to Refinance?
• Georgia Rides to the Capitol
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• Mortgage Rate Update – Week of October 13, 2008

New Program Modifies Mortgages to Help Stabilize the Real Estate Market

On Tuesday of this week the Bush administration unveiled a new program that will modify mortgages to help stabilize the real estate market.

Eligibility of the new plan is determined by several factors:  Homeowners must be 90 days or more late in their mortgage payments, owe at least 90% of their home’s current value, live in the home on which the mortgage was taken and have not filed for bankruptcy.

Under the plan, homeowner’s mortgage payments would be adjusted through lower interest rates or longer repayment schedules…in some cases up to 40 years.  The goal of the plan is to bring payments to 38% of monthly household income.

Currently the plan only applies to loans owned or guaranteed by Fannie and Freddie, however officials are hoping that it will soon be adopted industrywide.

Of the 18 million loans owned by Fannie and Freddie only 1.7% of them are delinquent by 90 days or more, this works out to be about 300,000 mortgages that could be eligible.

There is a strong interest from banks and mortgage finance firms to halt foreclosures because of the chain reaction they produce.  The market already has more homes for sale than there are qualified buyers and thus more foreclosures will drive down home prices further which will in turn lead to more foreclosures.  If you are behind on your mortgage loan it is strongly urged that you contact your lender as most are willing to setup some sort of plan to help with your payments and keep you in your home.

Possibly Related Posts:

• Is It Time to Refinance?
• Georgia Rides to the Capitol
• First-time Homebuyer Tax Credit
• Mortgage Rate Update – Week of October 13, 2008

Mortgage Rate Update – Week of October 13, 2008

Chicken Little, the sky isn’t falling…it only feels that way. The financial markets around the world plunged last week despite government intervention. After announcing they would purchase commercial paper, the Fed dropped the short-term Fed Funds Rate by .50%. However, uncertainty and fear filled the marketplace and the markets spiraled downwards.

Home loan rates went up about .50% higher than where they started!

What to expect:

Expect more volatility. We are seeing and will continue to see daily market movements that once took weeks. We will certainly see the government take additional steps and we should see some interesting headlines. We also have an active week with scheduled economic reports.

Trying to accurately pick the direction of home loan rates this week is honestly a bit futile. So, I’ll leave you with an opinion. Home loan rate should recover from last week if we can get confidence back in the market. We are in a slow economic period and that should bring rates back down. The question is “when”.

Breg-ometer:

Next 7 days: All over the place
Next 30 – 90 days: Conditions are right for rates to come down from this level

Courtesy of:
Bob Bregitzer

[tags]Roswell Mortgages, Atlanta Mortgages[/tags]

[where: 30075, 30076]

Possibly Related Posts:

• Is It Time to Refinance?
• Georgia Rides to the Capitol
• First-time Homebuyer Tax Credit
• New Program Modifies Mortgages to Help Stabilize the Real Estate Market