News for Prescott AZ - AmericanTowns.com

Monday, November 23, 2009

Weekly Rate Lock Advisory

Rate Lock Advisory - Sunday Nov. 22nd



This holiday-shortened week brings us the release of seven relevant economic reports for the markets to digest. All of the week's data is being posted over just three days, so the first part of the week should be interesting for mortgage shoppers.

October's Existing Home Sales data will be posted late tomorrow morning. This report, along with Wednesday's New Home Sales data are the least important reports of the week. They give us a measurement of housing sector strength and mortgage credit demand, but the bond market generally does not rely heavily on their results. They both are expected to show increases in sales, indicating that the housing sector may be strengthening.

The first important data comes early Tuesday morning when the first revision to the 3rd Quarter Gross Domestic Product (GDP) will be posted. The GDP revision is expected to show a downward revision from last month's preliminary reading of a 3.5% annual rate of expansion. Curre nt forecasts call for a reading of approximately 2.9%, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates, but it will likely take a smaller than expected reading for this report to improve mortgage rates.





November's Consumer Confidence Index (CCI) will be released by the Conference Board late Tuesday morning. It gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting to see little change from last month's 47.7 reading, meaning consumer were just as concerned about their own financial situations as they were last month. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher Tuesday.

There are four reports scheduled to be posted Wednesday morning. October's Durable Goods Orders is the first and will be posted early morning. This data helps us measure manufacturing strength by tracking orders for big-ticket items, but is known to be quite volatile from month-to-month. It is expected to show a 0.5% increase in new orders. A smaller than expected rise would be considered good news for the bond market and mortgage rates.





The second is October's Personal Income and Outlays data. This data is thought to measure consumers' ability to spend and their current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. It is expected to show that income rose 0.2% and that spending increases 0.5%. Smaller than expected readings would be good news for bonds and could lead to improvements in mortgage rates.

The revised November reading to the University of Michigan Index of Consumer Sentiment will also be posted late Wednesday morning. Analysts are expecting to see an upward revision to the preliminary reading of 66.0. Unless we see a significant variance from the forecasted reading, I don't think this data will cause much movement in mortgage rates Wednesday.





October's New Home Sales is the last report, but it is the least important. I don't think this data will influence mortgage rates unless it varies greatly from forecasts and the rest of the day's news matches forecasts.

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but they will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. Banks have to be open Friday , but we will likely see little change to mortgage rates that day.





Overall, I believe that it is going to be an active week for the mortgage market, particularly the first half. Friday will be the least important day of the week and either Tuesday or Wednesday will be the most important. I expect to see plenty of movement in rates the first couple of days, so please be careful and maintain contact with your mortgage professional if you have not locked an interest rate yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other b orrowers.

 

This is not the opinion of Brad Bergamini, Realty Executives Northern Arizona or any of its affiliates.  This post is for informational purpose only and is not guaranteed and does not render as legal advice.  Buying and selling Real Estate in Arizona or Prescott Arizona is a serious task and should be consulted with personally with Realtor or Real Estate Attorney.  Please visit my website for contact information

http://bradbergamini.com

 

 

 

Thursday, November 12, 2009

Here is some good information on the new home buyer tax credit.

Here is some good information on the new home buyer tax credit.

 

First Time Home Buyer Tax Credit

·         A First Time Home Buyer is defined as someone who has not owned a Primary Residence in the past 3 years

·         Once you marry a homeowner you automatically become a homeowner regardless of who is on the title and the loan (IRS rules, not my rules)

·         The buyer must have an accepted purchase contract by April 30, 2010 and fund/record by June 30, 2010 to qualify.

·         In Arizona, there is no way to use this money upfront for down payment or closing costs unfortunately

·         The Tax Credit is the lesser of 10% of the purchase price or $8000

·         The Tax Credit is “real money” that you get as part of your tax refund

·         This credit does not need to be repaid if you live in the home for 3 years

·         The credit begins to “phase out” for Singles with income above $125k/year and Married above $250k/year

·         The max purchase price of the home is $800k.

·         If Mom and Dad (that own a home) Co-Sign for their child to help him qualify, the child can still take the Tax Credit.  Perfect for an FHA loan!

·         This Tax Credit is a Tax Related issue and therefore you should consult a tax professional for advice.  Two good websites for info are www.federalhousingtaxcredit.com and http://www.irs.gov/newsroom/article/0,,id=206294,00.html  (IRS site still needs to be updated for the move-up buyer tax credit).

·         To claim the credit the buyer must include IRS tax form 5405 along with a Final Stamped HUD-1 Settlement Statement issued by the title company after a successful close.

 

”Move-Up Buyer” Tax Credit

·         A “Move-up Buyer” is defined as a home owner who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date.

·         The buyer must have an accepted purchase contract by April 30, 2010 and fund/record by June 30, 2010 to qualify.

·         In Arizona, there is no way to use this money upfront for down payment or closing costs unfortunately

·         The Tax Credit is the lesser of 10% of the purchase price or $6500

·         The Tax Credit is “real money” that you get as part of your tax refund

·         This credit does not need to be repaid if you live in the home for 3 years

·         The credit begins to “phase out” for Singles with income above $125k/year and Married above $250k/year

·         The max purchase price of the home is $800k.

·         This Tax Credit is a Tax Related issue and therefore you should consult a tax professional for advice.  Two good websites for info are www.federalhousingtaxcredit.com and http://www.irs.gov/newsroom/article/0,,id=206294,00.html  (IRS site still needs to be updated for the move-up buyer tax credit).

·         To claim the credit the buyer must include IRS tax form 5405 along with a Final Stamped HUD-1 Settlement Statement issued by the title company after a successful close.

·         Loan underwriting guidelines still state that a move-up buyer needs to qualify with both mortgage payments unless the primary residence that the borrower is vacating has 25%/30% (FHA/Conventional) equity along with a rental contract and proof of security deposit. 

 

 

Take Care,

 

Monday, November 09, 2009

YOU COULD BE A JAILBIRD IF...

I was sent an email the other day with the following. Please read all the way through. This in not scare tacticts just scary.

 

JAIL FOR NO INSURANCE UNDER PELOSI BILL

The nonpartisan Joint Committee on Taxation reported that the House version of the health care bill specifies that those who don't buy health insurance and do not pay the fine of about 2.5% of their income for failing to do so can face a penalty of up to five years in prison!

The bill describes the penalties as follows:

* Section 7203 - misdemeanor willful failure to pay is punishable by a fine of up to $25,000 and/or imprisonment of up to one year.

* Section 7201 - felony willful evasion is punishable by a fine of up to $250,000 and/or imprisonment of up to five years." [page 3]

That anyone should face prison for not buying health insurance is simply incredible.

And how much will the stay-out-of-jail insurance cost?  The Joint Committee noted that "according to a recent analysis by the Congressional Budget Office, the lowest-cost family non-group plan under HR 3862 (the Pelosi bill) would cost $15,000 by 2016."

Obama's bill only provides subsidies to help pay this enormous sum after families making about $45,000 have paid 8% of their income for insurance and after those earning a household income of about $65,000 have kicked in 12%. 

The Joint Committee on Taxation noted that while the Senate Finance Committee version of the bill did not include criminal penalties, "The House Democrats' bill, however, contains no similar language protecting American citizens from civil and criminal tax penalties that could include a $250,000 fine and five years in jail."

Remember that simply buying catastrophic insurance, which may be all the young uninsured family needs, does not constitute having adequate insurance under the Obama bill.  It has to be total, all inclusive insurance for one to avoid the penalties in the legislation.  That is because Obama wants to use these premiums from the currently uninsured to subsidize his program.

So Ms. Pelosi is requiring Americans to pay these steep premiums, or a fine of 2.5% of their income for not doing so, or, potentially, go to prison!

Anyone who is familiar with the U.S. prison system can attest to the large number of people incarcerated for similar white collar offenses.  That the House bill would treat failure to carry health insurance or pay the fine as tax evasion or willful nonpayment is amazing!

And where is the constitutional basis for requiring everyone to buy insurance?  It is OK for a state to make drivers pay for automobile insurance.  Driving is not a right, it is a privilege, and the state may regulate it by demanding insurance.  Banks can require homeowners to buy insurance as a condition of their lending.  But how does the federal government get the right to require a family to buy health insurance or face a civil penalty and, failing that, to face either a criminal fine or jail?

The tough penalties in the House bill are designed to keep insurance companies from opposing the bill.  It was the relaxation of these penalties in the Senate Finance Committee version of the legislation that led the companies to reverse field and come out in opposition to the legislation.  The insurance companies want to see their coffers swell when tens of millions of new customers are required to buy insurance.  The more draconian the penalties for failing to pay them large sums of money to pad their bottom lines, the better.

The more you read this bill, the worse it gets.

Monday, November 02, 2009

Brad Bergamini, real estate agent on Zillow

Share Prescott Real Estate News

Bookmark and Share

Brad Bergamini's answers on Trulia Voices

PRESCOTT, Arizona area homes for sale and listings from Brad Bergamini