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Real Estate & Finance News That Affects Your Home                                                                                                 Page  1 2 3 4

OCTOBER 2009 - Page 4

MORE FHA HELP Using First-Time-Buyer Tax Credit For Closing Costs As we've reported in previous issues, qualified first-time buyers (and those who haven't owned a principal residence in three years) can take a tax credit worth up to $8,000 if they close/settle on the purchase of a principal residence no later than November 30, 2009 (unless extended by Congress). The credit cannot exceed 10% of the home's purchase price. In late May 2009, the Department of Housing and Urban Development issued guidelines allowing the credit to be "monetized" so borrowers can apply it to closing/settlement costs and down payments (with restrictions). Prior to the new plan, borrowers who qualified for the credit had to wait for their federal income tax refund to actually receive it -- preventing them from using the cash to help with the home purchase. Now, approved institutions are allowed to offer bridge loans, secured by the anticipated tax credit, to borrowers of loans insured by the Federal Housing Administration. The monetized credit can then be used to help pay discount points (to reduce the mortgage interest rate), lender fees and additional down payment -- provided the borrower is able to pay FHA's minimum 3.5% down payment without using the tax credit. Here are two valuable online sources for more information: Summary of the First-Time-Buyer Tax Credit: www.TinyURL.com/ckywn4 HUD news release on monetizing the tax credit: www.TinyURL.com/ny8vun You can also contact the FHA Resource Center at (800) 225-5342. Timing Is Everything Your friends, neighbors and relatives may be thinking about buying or selling a home in today's market. And they may be looking for accurate, up-to-the-minute answers to their questions. We hope you'll pass this newsletter on to them after you've finished reading it. They'll appreciate the information and, as always, we'll appreciate your referral! SMART CHOICES Move Or Improve: What Makes Sense For You? Small improvements certainly are worth doing to make your home more livable and to increase its value. But if your home is too small, too far away from work or family, has the wrong floor plan or lacks a number of features you really want, chances are -- even if you remodel your current home -- the old floor plan still won't suit you well. While some remodeling jobs are worth the money spent, it's rare that a major addition or remodeling project will return 100% of the money invested in them -- often much less. In fact, homeowners who "over-improve" their homes in the hopes of boosting the value beyond neighborhood prices, unfortunately discover that buyers will not pay that price. If you're weighing your options, consider, too, the inconvenience of living through a major construction project, the challenge of financing it and the hassles of managing it. You're likely to get more of what you want, at a lower cost overall, by buying a different home that already has the amenities you want. For more information on selling or remodeling your current home, feel free to call us. Page  1 2 3 4