Clearfield Grant Money Available as of 4/15/09

Clearfield Grant money is now available, but it is limited and going fast! There are only 14 more grants of $5,000 available as of today (4/16). I have the 52 page program guideline if you would like me to forward it to you. There are income limits on the program, the buyer needs to be a first time home buyer, there is a forgiveness of the grant over a 7 year declining period and there is a 3:1 matching required (if the buyer puts $1667 down, Clearfield will give $5,000).

FAQ on the 2009 $8,000 tax credit

Here is a useful site to answer Frequently Asked Questions about the First Time Home Buyer tax credit: http://www.federalhousingtaxcredit.com/2009/faq.php#10

$6,000 State of Utah Grant Money Now Available

Governor signs bill for new homes grant

Gov. Jon Huntsman Jr. signed a bill yesterday that will provide $6,000 grants to buyers of newly constructed, never-occupied homes. Upon his signature, he immediately directed the Utah Housing Corporation to begin dispersing grants under the “Home Run” program to buyers who finance a recently constructed home with a 30-year (or less) fixed-rate mortgage and meet other qualifications.

Senate Bill 260 created a fund that will use federal stimulus dollars to provide about 1,600 grants to be distributed through Utah Housing Corporation to home buyers on a first-come, first-served basis.

To apply for the grant, home buyers should work through their lender. Any mortgage lender qualified to make mortgage loans under Utah law can assist home buyers to secure the Home Run grant, but Utah Housing has a list of currently approved lenders. Lenders will work directly with Utah Housing Corporation to apply for the grant money. Examples of qualifying mortgages include conventional, FHA, VA, Rural Housing and Utah Housing loans. Cash buyers should work directly with Utah Housing.

Consumers do not have to be first-time buyers to qualify for the program but incomes cannot exceed $75,000 for singles and $150,000 for married couples. Buyers who qualify for both programs can take advantage of the $8,000 federal home-buyer tax credit as well as a Home Run grant.

“It is up to the states to use the federal stimulus money in a way that truly has a beneficial impact on our economy. This is an immediate stimulus targeted at the weakest area of Utah’s economy,” Huntsman said in a press release. “This investment of $10 million will result in 8,800 jobs in the market and $324 million in wages into our economy. This boost is critical for us to reverse our current position.”

To learn more about program details and how buyers can apply, visit www.UtahHousingCorp.org . Also visit www.UtahHousingFacts.com for information about both the Home Run program and the $8,000 federal first-time home buyer tax credit.

Housing Affordability Index at a Record High

The National Association of Realtors’ Housing Affordability Index has risen 13.6 percentage points to 166.8, a new record high (December 2008: 153.2 to January 2009: 166.8). A value of 100 means that a family with the country’s median income has exactly enough income to qualify for a mortgage on a median-priced existing single family home. The higher the index, the more income buyer's are making relative to home prices (and the better housing affordability is for the buyer).

The reading shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970. “History suggests that home sales can rise even in times of job losses when housing affordability rises,” said Lawrence Yun, the association’s chief economist. (Source: The Enterprise March 16-22, 2009)

How long before our economy recovers?

IT MAY TAKE SOME TIME - The current bear market (defined as a drop of at least 20% of the S&P 500 stock index from a previous closing high) is the 9th bear market in the last 50 years and the 3rd where the loss has been at least 40%. The current bear’s “peak to trough” drop is 56.4%, the low close occurring just last Thursday (on 3/05/09). It took the S&P 500 index 70 months and 56 months to recover back to a new closing high following the 2 previous bears where the loss exceeded 40%. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

Refinancing Initiative: 105% of Current Market Value

Refinance Opportunities Now Available
to Those Who Lack Sufficient Equity

Revised March 4, 2009

The Obama Administration unveiled the final details of its "Making Home Affordable Program," which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

One of the initiatives in this program is aimed at helping responsible homeowners "refinance" their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

REFINANCING INITIATIVE

Who is eligible?

You may be eligible if:

• You own and currently occupy a one- to four-unit home.
• Your mortgage is owned or controlled by Fannie Mae or Freddie Mac.
• You are current on your mortgage payments.
• The amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
• And, you have a stable income sufficient to support the new mortgage payments.

How do I know if my loan is owned or controlled by Fannie Mae or Freddie Mac?

Simply call or email me. I'll help you determine if your mortgage is backed by Fannie Mae or Freddie Mac.

I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?

Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less, you may qualify. The current value of your property will be determined after you apply to refinance.

If I am delinquent on my mortgage, do I still qualify for the Refinance Initiative?

No. But the good news is, you may qualify for the Modification Initiative. Contact me to discuss your situation and review your options.

I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible for the Refinance Initiative.

Will refinancing lower my payments?

That depends. If your interest rate is much higher than the current market rate, you would likely see an immediate reduction in your payment amount.

However, if you are paying interest only on your mortgage, you may not see your payment go down. BUT... you will be able to avoid future mortgage payment increases and may save a great deal over the life of the loan.

What are the terms of the refinance and what will the interest rate be?

All loans refinanced under the plan will have a 30- or 15- year term with a fixed interest rate.

The interest rate will be based on market rates at the time of the refinance. Currently, interest rates are at historical lows, which makes this a good time to examine your refinancing options.

Will refinancing reduce the amount that I owe on my loan?

No. Refinancing will not reduce the principal amount you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

Can I get cash out to pay other debts?

No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

How do I apply for the Refinance Initiative?

Call or email me today to discuss your specific situation and to examine your options. If this plan is right for you, we can begin working on your refinance immediately.

As part of the discussion, we may need to look at the following information:

• Recent 30 days pay stubs to help determine your gross (before tax) household income.
• 2008 and 2007 w-2's and if self employed, your most recent 2 years income tax returns.
• Information about any second mortgage on your house.
• Account balances and minimum monthly payments due on all of your credit cards.
• Account balances and monthly payments on all other debts, such as student loans and car loans.

As always, if you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.

2009 Stimulus Plan Update

Revised February 20, 2009

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!

Phaseout Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.

Higher Loan Amounts

More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

Getting Ready to Move Checklist

Getting Ready to Move? Here is a Checklist! 4 WEEKS PRIOR TO MOVE: __ Set up a "move" file or folder __ Set up a "move" calendar. __ Have a garage sale. __ Collect financial, tax and employment documentation needed for your loan. __ Donate un-needed furniture to charity. __ Contact insurance company to transfer policies (life, auto, homeowners). __ Contact doctors, dentists for copies of medical records. __ Contact schools for copies of student records. 3 WEEKS PRIOR TO MOVE: __ Review tax deductions on moving expenses. __ Arrange cut-off date for telephone, gas,electricity, water, garbage, cable television. __ Call friends and relatives to let them know you are moving. __ Request change of address kit from post office. __ Check out voter registration information for the new area. 2 WEEKS PRIOR TO MOVE: __ Transfer stocks, bonds, bank accounts and contents of safe deposit boxes. __ Prepare a list of clothing that will not be packed with household goods. __ Take time to check off previous listed items while you still have time! 1 WEEK PRIOR TO MOVE: __Label items you will need to access easily and place them in separate room or closet. __ Clean out your refrigerator and let it air out at least 24 hours before moving. __ Drain outdoor equipment: Water hoses, propane tank from BBQ grill, gas and oil from lawnmowers. __ Discard all aerosols, paint, oils, and other flammable or toxic chemicals. __ Schedule with utility companies to have utilities turned on at your new home. MOVING OUT DAY: __ RELAX!!! __ Remember, items packed last will be unloaded first. __ Last Walk through Check: attic, stairwells, closets, cupboards, storage, garage and behind doors MOVE IN DAY: __ Have the house ready for delivery prior to the truck's arrival. __ Take a break, sit back, relax and ENJOY YOUR NEW HOME!! Take the stress out of your moving day! Call me if there is anything I can help you with!

2009 Economic Stimulus Plan Benefits

Economic Stimulus Plan Benefits

the Housing and Mortgage

Industries

Revised February 17, 2009

Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.

Home owners and potential home buyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...

---

Tax Credit for Homebuyers

First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

---

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

---

More Help for Homeowners in the Future

Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

American Recovery and Reinvestment Act of 2009

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).

         

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.