Your Mortgage Source, Inc. Blog

http://twitter.com/ur_mtg_src

Below is a link to an informative article regarding the ramifications of foreclosure by Roland D. Waller, esq of Waller, Mitchell & Barnett.

Life After Foreclosure

Who Qualifies for the Tax Credit?

• Never owned a home
• Have not owned a home within the last 3 years–determined by HUD 1 date when previous home was sold
• Purchased a home to be a primary residence between January 1 and November 30, 2009
• Owned a rental property or vacation home which was not used as a primary residence over the last 3 years
• If married and one person owned a home within the last 3 years, the other did not, they do not qualify
• If unmarried and one person owned a home within last 3 years and other did not, they can “designate” the tax credit to the one who is considered the FTHB.
• If parents cosign on a mortgage (and own a home) and the child is a FTBH, they are eligible for the tax credit.
• Non-US Citizens may qualify if they meet resident-alien status (IRS Pub 519)
• Revenue or Housing Bond financing are eligible for tax credits.

Types of Properties

• Primary Residence – Single family, 2-4 units (must occupy one unit) town homes, condos, manufactured homes, mobile homes and houseboats.
• New Construction – “Purchase Date” is the date the owner occupies the home (between Jan 1 and Nov 30, 2009) Note: They could have owned land and are in the process of building.

Income Limits

• $75,000 Single Person (Partial Credit up to $95,000)
• $150,000 Married Couple (Partial Credit up to $170,000)
• Based on Adjusted Gross Income (AGI) line on IRS Form 1040, 1040A or 1040EZ

Amount of Credit

• 10% of Sales price
• Up to Maximum of $8000
• Partial Tax Credit if income exceeds $75,000 or $150,000

Repayment Tax Credit

• If sold within 3 years, the entire tax credit needs to be repaid! After 3 years, no repayment is due.

Buyers should check with a tax advisor on how it will affect their individual tax returns.

Contact your local energy provider to see if they offer free energy audits of your home!

As of March 6, nearly 568,000 had claimed a first-time home buyer credit, according to the Treasury Inspector General for Tax Administration, which audits the Internal Revenue Service.

The federal credit is available to first-timers who purchase a principal residence this year and close prior to Dec. 1. The credit is equal to 10% of the purchase price, up to a maximum of $8,000, subject to certain income limitations. And as long as you occupy the property as your main home for three years, it need not be paid back.

Consumers can find comprehensive information on the tax credit at www.federalhousingtaxcredit.com.

According to Business Week, prices for homes and apartment buildings are falling all across the country. If you are looking for a solid investment, this is a great time to buy a rental property. Interest rates are low, property prices have dropped, and when the job market recovers, both rents and apartment prices are likely to see big increases.

These areas in Florida provided the most rental income for the money invested. The ranking is where they placed in the top 20 markets in the US.

*The price/rent ratio represents how many dollars of investment will generate $1 of rental income. The lower the ratio, the cheaper the apartments are in terms the rental revenue. The national price/rent average is 8.19.

Jacksonville, Fla.
Rank: 7
Price/rent ratio: 5.17
Median sales price: $41,000
Median rent: $757
Vacancy: 12.7%

Pros: The city continues to attract retirees, and the job market benefits from the development of the nearby naval station. The area is also home to several universities, including Jacksonville University.
Cons:The financial sector has been hit hard in recent months and values of apartment buildings have been declining as vacancies climb.

Orlando
Rank: 16
Price/rent ratio: 6.40
Median sales price: $57,000
Median rent: $824
Vacancy: 9.9%

Pros: Growing population and good long-term demographic trends.
Cons: The hospitality industry has been hit hard and Disney World has been laying off. Owners of unsold condos have been competing with traditional apartments for tenants.

Tampa-St. Petersburg
Rank: 18
Price/rent ratio: 6.56
Median sales price: $57,000
Median rent: $798
Vacancy: 9.3%

Pros: New construction of apartments has slowed.
Cons: Weakened job market. Condo owners who are unable to sell homes are competing with apartment owners for tenants.

Fort Lauderdale
Rank: 20
Price/rent ratio: 6.74
Median sales price: $78,000
Median rent: $1,038
Vacancy: 7.1%

Pros: Vacancies are relatively low; the location will continue to attract retirees and others who enjoy the warm climate and the beach.
Cons: Job losses, unsold homes competing for tenants with apartment buildings, condos being converted into rentals.

Link to original article: http://www.businessweek.com/lifestyle/content/apr2009/bw20090421_562421.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis