Updated 2/17/09
The $789-billion, 1100-page stimulus bill has benefits
for almost everyone.
The Fed will buy mortgage-backed loans
for as long as it takes to keep interest rates low.
Housing is a top priority for all. Up to $100 billion
will be spent to help. Under the Treasury’s plan, delinquent
homeowners will be able to redo their mortgages to avoid
foreclosure. The stimulus tries to spur buying with more
tax credits. And the Fed will buy T-bonds as needed to
keep fixed rate mortgages around 5%.
A boost for home buyers...and the housing industry:
An $8000 tax credit for first-time home buyers who buy a
home between January 1st and November 30, 2009 will need to
be repaid if they sell the home within 3 years (the previous
credit needed to be paid back eventually).
The credit begins to phase out for couples who make more
than $150,000 income per year, and for single filers making
more than $75,000 per year.
(More on home buyer benefits as details become available!)
Throwing billions at the problems means soaring deficits
and inflation later.
But policymakers see those as the least of the evils they
face. And it will help efforts to keep deflation from getting
out of control. That would lead to a downward spiral that
could get vicious and certainly would result in a much longer,
deeper recession.
About 65% of the money will go to spending,including
general and specific aid to the states, energy investments,
health and infrastructure.
Much of the spending will help businesses.
Infrastructure. States will get $29 billion to divvy
up for roads and bridges, $8.4 billion for mass transit,
$9.3 billion for rail and $6 billion in clean water projects.
How will Utah spend their State portion?
Utah, Nev., Wyo. and Idaho all get $200 million.
Widening roads is a priority for each: U.S. 6, I-15 &
I-70 plus Rte. 108 in the Ogden area, and fixing old
Bridges and Roads for Utah...
Tax cuts in the stimulus will help businesses and
individuals get a leg up. Smaller firms with losses
get a big break. They can carry back a 2008 tax loss
to offset income in the five prior tax years, instead
of two years, for a quick cash infusion. But this
relief is limited to firms with average gross receipts
of $15 million a year or less.
Workers will see more in their paychecks, thanks to
a payroll tax credit for 2009 and 2010: 6.2% of income
capped at $400 for singles and $800 for couples.
It will be phased out, however, starting at incomes
of $75,000 for single people and $150,000 for married
couples.
I will continue to update details of the final bill as
it is passed into law (Tuesday February 17, 2009 is the
anticipated signing of the bill into law by President Obama).
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Saturday, February 14, 2009
American Recovery and Reinvestment Act of 2009
Wednesday, February 4, 2009
Where Is The Bond Market Taking Mortgage Rates?
If you are still wrestling with "when is the best time to purchase or refinance", here is a great article to let you know what direction the bond market and the resulting direction it is taking rates.
I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.
Read on...
Inside Story: False Illusions and What You Need to Know
Last Updated February 4, 2009
The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed.
Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.
Here's the truth.
Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: Direct Link to View Fed Mortgage Bond Buying - http://www.newyorkfed.org/markets/mbs/index.html.
So why is the Fed buying these Bonds?
Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.
Stay with me here...
With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary.
Bottom line:
The Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.
Here's the most important part.
Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $250 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $250 per month right now, in the hopes of gaining another $30 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.
The clincher is this:
Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting.
While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $250 - for every single month they waited.
So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.
I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.
I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.
Read on...
Inside Story: False Illusions and What You Need to Know
Last Updated February 4, 2009
The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed.
Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.
Here's the truth.
Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: Direct Link to View Fed Mortgage Bond Buying - http://www.newyorkfed.org/markets/mbs/index.html.
So why is the Fed buying these Bonds?
Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.
Stay with me here...
With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary.
Bottom line:
The Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.
Here's the most important part.
Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $250 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $250 per month right now, in the hopes of gaining another $30 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.
The clincher is this:
Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting.
While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $250 - for every single month they waited.
So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.
I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.
Monday, February 2, 2009
$7500 Tax Credit for First-Time Homebuyer's!
Taking the First-Time Homebuyer Credit
Updated: 1/24/2009
Homebuyers could be eligible for a tax break, essentially an interest-free loan worth as much as $7,500, under The Housing Assistance Tax Act of 2008.
Known as the first-time homebuyer credit, the tax break is available if you purchase a home on or after April 9, 2008 and before July 1, 2009, and meet certain income and other requirements.
The credit is equal to 10 percent of the home purchase price, up to a limit of $7,500.
Unlike other tax credits, this one must be paid back to the government, over a 15-year period.
Who is considered a "first-time" homebuyer?
Any taxpayer who has never owned a home as a principal residence.
However, you could qualify if you’ve owned a home before, but not as your principal residence during the three years prior to the purchase.
Married couples cannot qualify for the credit unless both spouses meet the three-year rule.
What qualifies as a principal residence?
Your principal residence is where you live for most of the year. That can be a house, a condo, co-op, house trailer or houseboat, within the United States. Vacation and rental homes are not eligible.
What are the income limitations?
For single taxpayers, the credit decreases as modified adjusted gross income rises above $75,000, and it disappears altogether above $95,000. For example, if your income is $85,000, you could receive a credit worth no more than $3,750.
Modified adjusted gross income is your adjusted gross income, or AGI (your gross income minus certain deductions such as IRAs and alimony) with tax-free foreign income counted.
For married couples, the credit starts to decrease at modified adjusted gross of $150,000 and disappears after $170,000.
When would I get the money from the credit?
You get the money only after you claim the credit on either your 2008 or 2009 tax return, NOT when escrow closes on the home.
However, you can speed up the process if you buy a home in 2009, prior to July 1. Instead of waiting until you file your taxes in 2010, you can after Dec. 31, 2008 treat the purchase as if it were completed in 2008. That means you can amend your 2008 return and get the credit in 2009.
How does the credit affect the taxes I owe and the refund I get?
The credit reduces your tax liability, that is, the amount of taxes you are required to pay. Depending on your tax withholdings, you could get a bigger refund or owe less in taxes when you file.
Here's some examples:
If, for example, your taxes owed for one year are $6,000, you’ve had $4,000 withheld from your wages, and you buy a home worth $100,000 (sales price over $75,000, credit is $7500), the housing credit would entitle you to a refund, as shown below.
Tax liability
$6,000
Minus housing credit
-7,500
Minus withholding
-4,000
Refund
$5,500
But if, for example, your tax liability was $10,000, but you had paid no withholding, then the credit would reduce the taxes you owe, as illustrated below.
Tax Liability
$10,000
Minus housing credit
- 7,500
Minus withholding
0
Taxes due
$2,500
How do I repay the credit?
You start repaying the credit in the second year after the tax year that the home was purchased.
So if you took the credit on your 2008 tax return, you begin repayment when you file your 2010 tax return. Your payments are set at $500 per year for 15 years.
They are “paid” as part of your tax liability. Depending on your tax situation, you either get $500 less on your refund each year, or you owe $500 more in taxes.
You might need to increase your withholding or make quarterly estimated payments to cover for the repayment and ensure that you don't get penalized for under-withholding.
What if circumstances change?
-If you no longer use the home as your principal residence (say you rent it out), you pay the remaining balance on the tax return for the year the use changed.
-If you die before the 15 years, the balance does not need to be repaid.
-If you get a divorce and the home is transferred to your spouse, your spouse will be responsible for future payments.
Other considerations
The credit is not available if:
-You buy your home from a close relatives, such as your spouse, parents, grandparent, child or grandchild.
-Your home financing comes from tax-exempt mortgage revenue bonds.
-You are, or were, eligible for the District of Columbia first-time homebuyer credit for any year.
Updated: 1/24/2009
Homebuyers could be eligible for a tax break, essentially an interest-free loan worth as much as $7,500, under The Housing Assistance Tax Act of 2008.
Known as the first-time homebuyer credit, the tax break is available if you purchase a home on or after April 9, 2008 and before July 1, 2009, and meet certain income and other requirements.
The credit is equal to 10 percent of the home purchase price, up to a limit of $7,500.
Unlike other tax credits, this one must be paid back to the government, over a 15-year period.
Who is considered a "first-time" homebuyer?
Any taxpayer who has never owned a home as a principal residence.
However, you could qualify if you’ve owned a home before, but not as your principal residence during the three years prior to the purchase.
Married couples cannot qualify for the credit unless both spouses meet the three-year rule.
What qualifies as a principal residence?
Your principal residence is where you live for most of the year. That can be a house, a condo, co-op, house trailer or houseboat, within the United States. Vacation and rental homes are not eligible.
What are the income limitations?
For single taxpayers, the credit decreases as modified adjusted gross income rises above $75,000, and it disappears altogether above $95,000. For example, if your income is $85,000, you could receive a credit worth no more than $3,750.
Modified adjusted gross income is your adjusted gross income, or AGI (your gross income minus certain deductions such as IRAs and alimony) with tax-free foreign income counted.
For married couples, the credit starts to decrease at modified adjusted gross of $150,000 and disappears after $170,000.
When would I get the money from the credit?
You get the money only after you claim the credit on either your 2008 or 2009 tax return, NOT when escrow closes on the home.
However, you can speed up the process if you buy a home in 2009, prior to July 1. Instead of waiting until you file your taxes in 2010, you can after Dec. 31, 2008 treat the purchase as if it were completed in 2008. That means you can amend your 2008 return and get the credit in 2009.
How does the credit affect the taxes I owe and the refund I get?
The credit reduces your tax liability, that is, the amount of taxes you are required to pay. Depending on your tax withholdings, you could get a bigger refund or owe less in taxes when you file.
Here's some examples:
If, for example, your taxes owed for one year are $6,000, you’ve had $4,000 withheld from your wages, and you buy a home worth $100,000 (sales price over $75,000, credit is $7500), the housing credit would entitle you to a refund, as shown below.
Tax liability
$6,000
Minus housing credit
-7,500
Minus withholding
-4,000
Refund
$5,500
But if, for example, your tax liability was $10,000, but you had paid no withholding, then the credit would reduce the taxes you owe, as illustrated below.
Tax Liability
$10,000
Minus housing credit
- 7,500
Minus withholding
0
Taxes due
$2,500
How do I repay the credit?
You start repaying the credit in the second year after the tax year that the home was purchased.
So if you took the credit on your 2008 tax return, you begin repayment when you file your 2010 tax return. Your payments are set at $500 per year for 15 years.
They are “paid” as part of your tax liability. Depending on your tax situation, you either get $500 less on your refund each year, or you owe $500 more in taxes.
You might need to increase your withholding or make quarterly estimated payments to cover for the repayment and ensure that you don't get penalized for under-withholding.
What if circumstances change?
-If you sell the house before the end of 15 years, you will have to pay the balance remaining on the credit on the tax return for the year the house was sold.
-If you no longer use the home as your principal residence (say you rent it out), you pay the remaining balance on the tax return for the year the use changed.
-If you die before the 15 years, the balance does not need to be repaid.
-If you get a divorce and the home is transferred to your spouse, your spouse will be responsible for future payments.
Other considerations
The credit is not available if:
-You buy your home from a close relatives, such as your spouse, parents, grandparent, child or grandchild.
-Your home financing comes from tax-exempt mortgage revenue bonds.
-You are, or were, eligible for the District of Columbia first-time homebuyer credit for any year.
Call me with any questions you have about this program!
Friday, January 9, 2009
Utah Mortgage Reverse Mortgage Specialist
Meeting the needs of those over 62 years old, who need a lump sum equity draw or need a monthly income draw against equity in a home that they own and live in, is a loan that I can help with!
The FHA Reverse Mortgage or HECM is a loan with over 200 pages of disclosures required by the Government, and I make the explanation of the loan and answers to questions painless, simple and understandable!
I look forward to helping with all Reverse Utah Mortgage needs that you or someone you know needs help with!
The FHA Reverse Mortgage or HECM is a loan with over 200 pages of disclosures required by the Government, and I make the explanation of the loan and answers to questions painless, simple and understandable!
I look forward to helping with all Reverse Utah Mortgage needs that you or someone you know needs help with!
Utah Mortgage Program Update
Buyer's, Seller's and Realtors: Unfortunately, investors are pulling away from FHA Manufactured Housing Financing and as of today, I have 1 investor who will take a loan on Manufactured Housing on a permanent foundation! And this investor has already notified us that they are withdrawing this offering shortly.
Realtors, my Utah Mortgage Blog Post today is to alert you of this and if you have any manufactured housing purchases that need a loan-HURRY- and call me so that we can get an FHA case number and get this taken care of for them! If you have manufactured housing listings, it might be a great time to talk to your client about a price reduction so that the home will sell quickly!
Hope this helps, sorry for the news, but we are living in interesting times, aren't we?! :)
Marty
Realtors, my Utah Mortgage Blog Post today is to alert you of this and if you have any manufactured housing purchases that need a loan-HURRY- and call me so that we can get an FHA case number and get this taken care of for them! If you have manufactured housing listings, it might be a great time to talk to your client about a price reduction so that the home will sell quickly!
Hope this helps, sorry for the news, but we are living in interesting times, aren't we?! :)
Marty
Utah Mortgage Loan
Please call me for a customized rate quote for Utah Mortgage Rates. As a Utah Mortgage Broker, I look forward to helping you with your Utah Mortgage needs!
Thursday, January 8, 2009
Welcome to my Utah Mortgage Blog!
Thanks to the recent U.S. Treasury pledge to purchase $500 Billion in Mortgage Backed Securities beginning the first week in January and to continue until the end of 2009, Utah Mortgage Rates will be at a level not seen during our lifetimes!
During the past 30 days and continuing for the next 60 and beyond, we will see Utah Mortgage Rates at unprecidented levels. We will see volatility, and huge volatility at times, but Utah Mortgage loans will be available to consolidate debt, combine first and 2nd mortgages into one loan, purchase dream homes, or to help first time home buyers get a start!
First Time Homebuyer's are still enjoying the $7500 tax credit for homes purchased before June 30, 2009, Utah Housing is providing 100% financing to qualified buyer's and city and county grant and loans are also avaialble to those who qualify.
I look forward to helping you with your Utah Mortgage Loan needs!
During the past 30 days and continuing for the next 60 and beyond, we will see Utah Mortgage Rates at unprecidented levels. We will see volatility, and huge volatility at times, but Utah Mortgage loans will be available to consolidate debt, combine first and 2nd mortgages into one loan, purchase dream homes, or to help first time home buyers get a start!
First Time Homebuyer's are still enjoying the $7500 tax credit for homes purchased before June 30, 2009, Utah Housing is providing 100% financing to qualified buyer's and city and county grant and loans are also avaialble to those who qualify.
I look forward to helping you with your Utah Mortgage Loan needs!
Thursday, November 27, 2008
Chris Clark and Megan Dewey Closing
Wade Clark, Real Estate Concepts, 801-645-2218, Megan Dewey and Chris Clark, and Marty Qualls at First American Title, Closing on November 26, 2008.
Friday, November 21, 2008
Rate Watch: Carefully Floating
The Squeeze Play is ON! The falling trend line I have been tracking for the past 4 days is now in a triangle formation with the 200 day moving average and current Bond Prices. For today, after my alert to lock yesterday at midday, I am recommending Floating as we see how the Bond Chart Pricing struggle continues to form. Bonds will break our from this formation one way or the other, up or down, rather than stay at the 200 day moving average which is where Bonds have been touching for the past 14 business trading days.
After the past few days of significant losses, Stocks are attempting to recover and Bonds will be taking direction from Stocks and from the triangle pricing struggle mentioned above.
After the past few days of significant losses, Stocks are attempting to recover and Bonds will be taking direction from Stocks and from the triangle pricing struggle mentioned above.
Thursday, November 20, 2008
Rate Watch 11/20/08: Float to Lock
Bonds started out better this morning, but worsened, and at 1:00 I issued an alert to Lock Advice. Bonds continue to touch the 200 day moving average for the 13th consecutive day.
HERE is the BIG news of the day! The October Fed Meeting Minutes were released yesterday. The Fed has expressed concern about deflation. The "D" word.
Deflation is when prices drop, mainly due to decreases in money supply and credit. In a deflationary environment, investors flee into fixed instruments, like Bonds. Going back to the Spring of 2003, Alan Greenspan uttered the "D" word. Mortgage Bonds rallied 400 basis points in a couple of weeks, setting off an unprecedented refi-boom.
It will take investors waking up to the bargain value of Mortgage Bonds for the rally to begin. I want to let everyone know that we may be on the verge of the refi Boom which I know you have been waiting for. Things are MUCH different now than they were in 2003, but I am watching this VERY closely!
Prices have barely peaked above the 200 day moving average. And here is a quick reminder about 2003: When Alan Greenspan came back and later said there is NO threat of deflation-the refi-boom ended Qucikly and rates shot up dramatically (1% higher in 4 days-I was there, I lived it, I saw it!). Stay tuned, we are living history again!
Be ready for my call to you to alert you on dramatic drops in rates to take advantage of!
When it happens, we may have a SMALL window of opportunity to take advantage of!
HERE is the BIG news of the day! The October Fed Meeting Minutes were released yesterday. The Fed has expressed concern about deflation. The "D" word.
Deflation is when prices drop, mainly due to decreases in money supply and credit. In a deflationary environment, investors flee into fixed instruments, like Bonds. Going back to the Spring of 2003, Alan Greenspan uttered the "D" word. Mortgage Bonds rallied 400 basis points in a couple of weeks, setting off an unprecedented refi-boom.
It will take investors waking up to the bargain value of Mortgage Bonds for the rally to begin. I want to let everyone know that we may be on the verge of the refi Boom which I know you have been waiting for. Things are MUCH different now than they were in 2003, but I am watching this VERY closely!
Prices have barely peaked above the 200 day moving average. And here is a quick reminder about 2003: When Alan Greenspan came back and later said there is NO threat of deflation-the refi-boom ended Qucikly and rates shot up dramatically (1% higher in 4 days-I was there, I lived it, I saw it!). Stay tuned, we are living history again!
Be ready for my call to you to alert you on dramatic drops in rates to take advantage of!
When it happens, we may have a SMALL window of opportunity to take advantage of!
Wednesday, November 19, 2008
Rate Watch 11/19/08: Floating
Bonds continue to trade at, just slightly below, and just slightly above the 200 day moving average for the 11th straight day. For now, I recommend floating to see which way the market breaks and will alwert you when this happens.
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