Interest Rates Will Rise

In December of 1980, the prime rate peaked at 21.5% and the cause was massive government borrowing.  The more competition there is for money, including by federal, state and municipal governments, the more it will cost to borrow.  All the bail outs, tax credits, and other programs enacted to stimulate the economy cost money that we don't have.  A number of states are even borrowing to pay unemployment benefits to the jobless.  This is bound to cause an increase in mortgage rates. 

 Inflation Will Rise

And the dollar will be worth less!  This may be good news if you're wanting to sell your home--it'll be worth more $$$--but the $$$ will be worth less!  And it will cost more $$$ to buy your next home!   

BEST TO MOVE SOON, if you're planning to move in the near future! 

There are many benefits to home ownership, but the decision to buy a house remains a complex one with many factors to consider.

Make the decision easier for yourself by asking for our free guide, "Should You Buy a Home?"

Just reply to this email and we'll send it right out to you.

I want to sell my house as quickly as possible and for a good price. What kind of mistakes must I avoid making?

The single biggest mistake people make is setting the asking price too high. An amount suited both to the home and to the market conditions attracts the greatest number of prequalified buyers, increasing the likelihood that you'll get a higher price in the end.

Houses not shown at their best are another source of lost profit. Act on any advice you are given about cosmetic changes and minor repairs.

Also:

•    Set viewing hours for the greatest accessibility to buyers. In a competitive market, people can easily go elsewhere and fall in love with another house.

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On November 6^th, the Worker, Homeownership and Business Assistance Act of 2009 was signed into law, thus extending the $8,000 First Time Home Buyer Tax Credit and creating a new $6,500 Repeat Home Buyer Tax Credit.  As with the original tax credit, there are requirements that must be met.  

A first time buyer is one who has not owned a principal residence during the three years prior to the purchase.  For married couples, if one spouse has owned a principal residence during these three years, both spouses are disqualified.  However, unmarried joint purchasers can allocate the credit amount to any buyer who qualifies as a first-time buyer, as might happen when a son or daughter buys jointly with a parent. 

Ownership of a vacation or rental property that’s not used as a principal residence does not disqualify a buyer as a first-time buyer. 

Repeat buyers who buy a principal residence can qualify if they have been residing in the home they currently own (or previously owned) for at least five consecutive years out of the past eight years.  Repeat buyers can be moving up or down.   

All homes with a purchase price that doesn’t exceed $800,000 qualify, including newly-constructed and resale houses, town homes and condos, manufactured/mobile homes and houseboats, as long as they are purchased and used as the buyer’s principal residence. 

Vacation or rental properties and homes purchased from a relative do not qualify.   

Income limits apply:

·         Single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.

·         For married couples filing a joint return, the combined income limit is $225,000. 

·         Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

·         The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. 

The credit is issued for 10% of the purchase price of the residence purchased, up to $8,000* for first-time buyers and up to $6,500 for repeat buyers who qualify.  (For example, the credit for purchase of a $70,000 residence by a qualified first-time buyer would result in a $7,000 tax credit.  If purchased by a qualified repeat buyer, the tax credit on a $70,000 residence would amount to only $6,500.) 

The tax credit can be used to reduce the amount the buyer owes the IRS for income taxes.  For example, if a first-time buyer owes income taxes of $10,000, this could be reduced to only $2,000 ($10,000 less $8,000*) with the tax credit.  If the first-time buyer owes income taxes of $5,000, he or she could receive a check from the government for $3,000 (the $8,000* credit less the $5,000 owed), rather than pay any tax liability.  (*The credit may be less, if the purchase price of the residence purchased is less than $80,000.)   

The tax credit does not have to be repaid unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.   

To take advantage of the credit, buyers must have a signed sales contract in place by April 30, 2010 and the closing must take place by June 30, 2010.  Since closing on a home can take up to six weeks or more—after the home is under contract—wise buyers will want to get into the market quickly so that they have plenty of time to shop and find the right home.   

All of us here at Quigley Team Realty wish you and your families a very peaceful, prosperous and enjoyable 2010!  May it be your best year yet!