Thursday, July 23, 2009

New $8,000 Tax Credit For First Time Home Buyers

Great news for first-time home buyers in 2009! The stimulus plan that President Obama signed into law contains a new $8,000 tax credit for qualified first-time home buyers. And, unlike the $7,500 tax credit from last year, this credit does NOT have to be repaid to the government, as long as you stay in the home for at least 36 months after the purchase date. Remember, a tax credit is much more valuable than a tax deduction. A tax credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. This means the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Click here to download a copy of the IRS Form 5405 needed to apply for the tax credit.
First-time buyers or anyone who hasn't owned a home in the 3 years prior to a purchase of a primary residence may qualify for a tax credit of up to 10% of the purchase price or $8,000, whichever is less. To qualify for the full credit, the buyer's modified adjusted gross income must be less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. Partial credit is proportionally reduced for incomes under $95,000 (single) or $170,000 (married). For married taxpayers, the homeownership history of both the home buyer and his/her spouse are taken into account. This means if you or your spouse has owned a principal residence in the last 3 years, neither you nor your spouse qualifies for the credit.
According to the IRS, a primary residence is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence. If you constructed your main home, you are treated as having purchased it on the date you first occupied it.
The $8,000 tax credit is available for qualifying home purchases made from Jan. 1, 2009, until Dec. 1, 2009. This is not a typ-o. To receive the credit you must purchase a qualified home before December 1st, 2009 – not the end of the year.
Unfortunately, as of today (July 23, 2009) you can NOT use the credit as a down payment. But, law makers are pushing to implement a creative way to do so. To receive the credit, you must purchase a qualified home first and then claim it on either your 2008 or 2009 taxes. If you make a qualified purchase after April 15, or after having already filed your 2008 taxes, you and your tax professional can submit an amendment to your return. To claim the credit, use form 5405. For help with amending your 2008 tax returns, contact me and I will give you the necessary information to do so.
The current combination of Zero Down home loans, lower home prices and lower interest rates makes for an amazing opportunity to buy real estate. Add to that, this $8,000 gift from the government, and renting a home just doesn't make much sense. If you or someone you know is ready to stop paying the landlord's mortgage and start building equity in your own home, give us a call. We'll run the numbers and see what makes sense for your individual financial needs.

Sunday, July 19, 2009

5 Ways To Increase Your Credit Score - And FAST!

If you are looking to improve your credit score quickly, now is the time to get started. Give us a call. We'll review your credit and find out exactly where you stand and where you need to get to. In the meantime, here are some great strategies you can utilize right away to give your score a little boost.

Create Some Balance: While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts without discussing it with your mortgage professional first. Canceling those cards may inadvertently undo all of your hard work.

Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.

Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don't report your information to all three credit companies - this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you're in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say isn’t.

Protect Your Interests: Your credit is calculated based solely on the information available to your creditors. If you have a HELOC, make sure it's listed as a mortgage or an installment account on your credit reports and not a revolving debt. If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported correctly, that is with a zero balance. This action could increase your score by 50-100 points. Because simple mistakes like these can wreak havoc on your credit score, it's important to monitor your credit every four to six months.

Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. For the fastest results, visit the appropriate credit bureau's website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail. If you'd like more information or a copy of our Sample Dispute Letter, give us a call right away. We'll be glad to help you in any way we can or, if it becomes necessary, refer you to credit professionals you can trust. If you or anyone you know has any questions about credit scores or what can be done to repair them, please don't hesitate to call me.

Tuesday, July 14, 2009

SMART MONEY - Interest Rate Buydown vs. Price Reductions

In nearly every instance when you negotiate with a seller to lower their asking/selling price, you are leaving thousands-and-thousands of dollars on the table - dollars that could have been used to create compelling reasons for a buyer to purchase your listing.

“My goal is to help you change your mind-set and implement new strategies when it comes to marketing slow moving property. The most popular strategy employed today by Realtors to sell slow moving property is to REDUCE THE PRICE on a home.”
------------- Rate Buydown Flyer:
------------- Rate Buydown Packet:

The idea that price reduction is a great marketing tool for selling property in today’s changed market is a myth. Price reductions are a “Ho Hum” means of marketing. It is certainly not a “Thinking Outside The Box” type of marketing. Potential buyers that drive through neighborhoods looking for that “special” house are confronted with FOR SALE signs all over the place that tell them nothing about the property except that there is perhaps a “new price” for the home. Most Realtors fail in their observable marketing to provide a compelling reason for buyers to inquire further about their listings. Lowering the sales price may move some stagnant properties a bit sooner, but as a primary marketing tool, it falls way short of the benefits you will gain from the other efforts talked about in the attached booklet.

With a full shift in power from a seller’s market to a buyer’s market, both buyers and sellers need to re- evaluate the best approach to a transaction. The examples below illustrate how a “Closing Cost Credit” (3% for closing) from the seller, when applied toward a buyer’s Interest Rate can produce significant monthly savings for the buyer, and re-position the property to stand out against it’s competition. In this example, we used 3% in points or $13,500 to permanently buy down the interest rate from 5.00% to 4.00% resulting in a Net Savings of $241 a month.

Also, the “points” are usually a tax deduction in the year the property was purchased for the buyer. Please consult your CPA for specific information. This example shows you the power of reducing Interest Rate versus Sale Price. BUYER: Let me show you a smarter strategy to help you finance the purchase of the home of your dreams! SELLER: Let me show you a money saving strategy to help you market the sale of your home and saving you thousands of dollars in the meantime. E-mail me for more information at

Monday, July 6, 2009


Yes The Bank Will Modify Your Loan, They Just Won’t Deal With You...
After I declined approximately 30 loans in early 2009, I knew that I had to do something to help my clients through the declining real estate market as well as the tough economic times. I was beginning to get more phone calls concerning the need to lower their monthly payment due to a hardship or potential employment issue. I tried researching different types of loan programs, loan modification, as well as talking to certain banks and lenders about their own loss mitigation guidelines... and nothing, I got nothing other than “Just have your clients call their bank and work it out with them...”. Well, that’s a joke. If you’ve ever called your mortgage servicer, you understand that most of the time you are talking to someone that speaks fluently in another country, and 10 times out of 10, they cannot help you... Countrywide alone has over 23,000 listings themselves and they are a bank, not a real estate firm... these banks do not have the time or staff to take on any more foreclosures... So eventually after trying to help a client through a loan modification in February, I realized that 3 months and hundreds of hours later, we finally got through to someone in their loss mitigation dept. that could help us, and eventually they did - 2 ½ months after that conversation... So, 6 months later, and numerous payments in default, my client’s loan was modified, but come to find out, very poorly modified, and now they were stuck with paying back all past due payments as well as the reduction in interest rate as capital gains (the importance of using an attorney assisted loan modification company). But check this out - in March, a miracle happened at Disney Land of all place... I took my family on a vacation to Disney Land and met my wife’s uncle Ken. I've heard about Ken, but never met him. On the way to dropping us off at Disney Land, we began talking about what he does, and immediately, I felt like a kid in a candy store, as though I was talking to the Babe Ruth of finance... (forget Disney Land I said, let’s go back to your office, but unfortunately Jenny would allow that...) He has been originating loans in Orange County for years and he basically stopped originating loans to begin modifying loans... California is one of the hardest hit states from our recent housing bubble and Ken, thinking outside the box, shifted gears in 2008 and is strictly modifying loans today. He has partnered with a law group in Orange County and together they are changing lives, seriously - amazing, credible, stuff that it keeping people in their homes, and securing their mortgage. He showed me some amazing examples of how they are taking hundreds of clients from higher 6%-7% interest rates, to 3%-3.5% fixed for 30-years... this stuff was amazing. He showed me numerous examples of people they were even able to help reduce their principle balance and interest rate together... I was ready to start doing this full time once I returned from my vacation. However, I got back and my company published a press release prohibiting any of their loan officers to participate in loan modification up in WA State... so in the meantime, until we can, I am referring people to my uncle Ken in California... Let me know if you have someone in mind that is in a hardship or faced with losing their home. I will get you his contact information- it's never too late. SPREAD THE WORD ABOUT THIS NEWS! IT IS TRULY UNBELIEVABLE!!!

Thursday, July 2, 2009

Financial Peace Class # 1 - A Huge Success!

Congratulations to those who graduated from my Financial Peace University Course last night! You are well on your way to Financial Peace! I had the privilege to teach Dave Ramsey's 12-week financial literacy course called Financial Peace over the past 3 months to 20 amazing people who now have a plan, a "Peace" of what to do in creating their budget, savings, insurance planning, mortgage, real estate, and longer-term investments. If you are interested in taking this course, I am offering it again in September and the cost is FREE, except for the workbook you have to purchase through Financial Peace University ($100). I was able to see this course change people's financial lives, and through these principles, my students now have a blue-print, a game plan for achieving their own Financial Peace in BECOMING DEBT FREE! I was absolutely amazed: In a 12-week period, how many of my students accomplished "baby steps 1, 2, and even 3, in creating an emergency fund of $1000, paying off debt using the debt-snowball method, and even beginning to save up their entire 6 month reserve account. Great Work Team! If you are interested in this course, I'd be happy to get you additional information and in the meantime, buy you a copy of Dave's book, "The Total Money Makeover" to get you started. The next step would be to enrol in our fall course at View Ridge Community Church. For your own copy of Dave's Total Money Makeover, e-mail me at