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Five smart tips for home buyers

by Diane Cardano-Casacio & Her Team

1) Get pre-approved for a mortgage before you make an offer.
When you are trying to buy a house in a competitive market, your offer to purchase should contain as few conditions as possible. An offer that is conditional on obtaining financing is often a deal killer. The seller may accept a competing offer for less money rather than take the risk that you won’t be able to raise mortgage money. A pre-approval letter from your lender tells the seller you are ready and able to commit.

2) Know when to quit.
When you act on emotion, rather than reason, you may end up paying too much money. This can happen when you fall in love with a particular house and start fantasizing about how great it will be to live there. Another reason you may be driven to pay too much is that a bidding war triggers your competitive instincts and you must buy the house at all costs – which you will regret later.

3) Set enough money aside to cover closing costs without having to forgo eating for a couple of months.
You’ve put together a down payment. Be aware that there is also a long list of expenses you may have to pay at closing, depending on where you live and who your lender is. Closing costs can add up to between two and six percent of your loan, so ask your lender to give you a Good Faith Estimate of the loan-related fees you’ll have to pay. Get your real estate agent to compile a list of other expenses.

4) Try to coordinate the date you take possession of your new home and your moving date.
If possible, avoid a situation where you’ve got to camp out with relatives or find a short-term rental because you must vacate your old house or apartment before you can move into your new digs. Moving once is enough.

5) Insist on a home inspection.
The first really cold day you spend in your new house is way too late to find out that the furnace doesn’t work. The one condition you should always include in an offer to purchase is a home inspection. Find out how much it will cost to fix any defects and have the seller fix them before you agree to buy or deduct the estimated cost from the final price you offer. If the seller won’t help bear the costs, and you want to go ahead with the purchase, make sure you can afford the necessary repairs on top of your mortgage.

 

Source: http://www.lendingtree.com/real-estate/advice/buying-a-home/smart-tips-for-home-buyers/

How To Fix Your Credit After The Holidays

by Diane Cardano-Casacio & Her Team

Now that the holidays are over, the credit card bills will start to come. Here is some advice on how to deal with credit card debt after the holidays and which bills to pay first. Watch CNN's Ali Velshi talk about which bills you should pay first if money is tight. Watch the video for more information!

http://www.cnn.com/video/#/video/bestoftv/2009/01/06/pn.helpline.what.to.cancel.cnn

This answers questions such as:

Does having too many credit cards, even with a $0 balance, negatively affect me?

Does the bankruptcy of a company affect my 401k?

What should I put money towards first? Should I stop 401k or 403b contributions to create emergency fund?

Should I borrow off a 401k to pay my credit card debt?

Philadelphia Area Real Estate: Not As Bad As Others in 2009

by Diane Cardano-Casacio & Her Team

Philadelphia and its suburbs did not make the list of top cities that will experience even more decline in the year 2009. CNN ranked 10 cities they feel will continue to struggle through the market's downturn, citing projections for the decline in median house prices. Major cities and suburbs of California make up the majority of the list and have the worst real estate outlook for 2009 with Miami and Washington, D.C. rounding out the list. It looks like the Philadelphia, Montgomery County and surrounding areas won't be as bad off as some when it comes to 2009. Let's look forward to a great year!

View the full story below: http://money.cnn.com/galleries/2008/fortune/0812/gallery.worst_markets.fortune/index.html

Awesome Low Rates For First Time Buyer And Below Market Homes!!! Can't beat This Market.

by Diane Cardano-Casacio & Her Team
Hello Everyone!! Check out today's interest rates... The market is starting to make its way back. We sold 10 homes in the last 2 weeks compared to only 5 homes in the previous month.... Get homes emailed to you daily at www.SearchMontgomeryCountyHomes.com   every 15 minutes you will get updates.
Make sure you don't get eaten by the Mortgage Lender Shark.... Call us to introduce you with the Lender who will save you money!  Just like we negotiate for you like a Pit Bull and treat your money like it is ours, we make sure the people that we refer to you are also working for you not just for their commission check.

CHECK OUT TODAY'S Low Rates
30 Yr Fixed – 5.5%
15 Yr Fixed – 5.875%
Jumbo 5/1 ARM - 5.5% (Max LTV 75%)
Jumbo 7/1 ARM – 5.75% (Max LTV 75%)
FHA – 6%
100% USDA Loan – 6%
Investment – 7.375%
 
*Rates are based on 80% loan to value and 720+ credit score (with the exception of FHA and RD) *Income and Asset verification required and must meet DTI guidelines *APR .25% higher than interest rate *This is not a commitment to lend and other conditions may apply *All rate quotes shown come with 1% loan discount fee *100% RD loan has income and area restrictions.
FREE HOME BUYER CLASSES MONTHLY Find out How to Fight the Money Hungry Home Buying Sharks . Class will be held the 3rd Tuesday of every month at the Abington Library. Call to secure your seat at 888-708-8084, ext 250. 24 Free Recorded Message

Free Government Money When Buying A Home!!!

by Diane Cardano-Casacio & Her Team

First Time Home buyer Tax Credit

Frequently Asked Questions About the First Time Home Buyer Tax Credit

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home - new or resale- are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purpose of the tax credit, the purchase date is the date when closing occurs.

2. What is the definition of a first time home buyer?
The law defines "first time home buyer" as a buyer who has not owned a principal residence during the three year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first time home buyer.

3. How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first time home buyer tests.

4. What types of homes will qualify for the tax credit?
Any home purchased by an eligible first time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single family detached homes, attached homes like townhouses and condominiums, manufactured homes (aslo know as mobile homes) and houseboats.

5. Instead of buying a new home from a home builder, I have hired a contractor to contrust a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purpose of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

6. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (know as "adjustments" or "above-the-line-deductions"),but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040 EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI) add to AGI certain amounts such as foreign income, foreign housing deductions, student loan deductions, IRA contribution deductions and deductions for higher education costs.

7. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.

8. Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To multiply $7,500 by 0.5. The result is $3,750.

Here's another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0 the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.

Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

9. Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing seperately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.

10. Are there any circumstances for the buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.

11. I heard that the tax credit is refundable. What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involes the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would recieve a check for $6,500 ($7,500 minus the $1,000 owed).

12. What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer's tax liability would be reduced by $1,125 (15 percent of $7,500) or lowered from $7,500 to $6,375.

13. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.

14. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.

15. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principle residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

16. Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

17. Why must the money be repaid?
Congress's intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.

18. Because the money must be repaid, isn't the first time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the homeowner saves up to $4,200 in interest payments over the 15 year repayment period. Compared to $7,500 financed through a 30 year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.

19. If I'm qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occured on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

20. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

21. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Yes. Prospective home buyers who blieve they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raiding his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their emplyer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the indivdual would be liable for repayment to the IRS of income tax and possible interst chatges and penalties.

Call our 24 Hotline to find out if you qualify for our below market homes and use your tax credit to purchase it!!  888-708-8084, ext203!! 

 

New housing law provides great opportunity for first-time home buyers

by Diane Cardano-Casacio & Her Team

Wow, don't miss out on this! It is a great time to buy a home!!

One of the most important provisions in the housing law is a first-time homebuyers' tax credit. Under this new law, first-time homebuyers will get a tax credit of 10 percent of the purchase price, up to $7,500 (or up to $3,750 each for two homeowners who file their taxes separately). The law defines a first-time homebuyer as someone who hasn't owned a home in three years. In the case of couples, if either spouse or partner has owned a home in the past three years, both are ineligible to take the tax credit. The credit applies to any qualifying person who buys a home from April 9, 2008 through June 30, 2009.

It is important to understand that a person who buys a first home during this period will get a dollar-for-dollar credit on his/her income taxes. For those expecting a refund, that amount will be increased by the amount of the credit and result in a larger refund.

If you or anyone you know is thinking of purchasing a home in Montgomery or PHiladelphia County, go to www.dianecardano.com and sign up for Free listings to be emailed to you daily as well as a Free pre-approval for a mortgage. See if you qualify for this tax credit!!

Have a Happy Halloween!! Go Phillies!!

Client Appreciation Party Is ON!!!

by Diane Cardano-Casacio & Her Team

HI to All Clients scheduled to attend the party on Friday SEptember 26th... we have orderd a tent for us to tailgate... We have a DJ, great food and it will be an exciting game!! Please dress warm, we will be handing out red hats for us all to wear in the game together. For those of you coming late and picking up tickets at the will call, we will have hats for you when you get there!!

STay tuned and come back to Dianes Journal for an update on the game!!

Also, don't forget our next Seller seminar is either October 22nd or October 28th!! Please send your friends... dinner and great information all in one night....

 

What's Up With This Real Estate Market?

by Diane Cardano-Casacio & Her Team

Everyone wants to know.... inquiry minds want to know, what is happening with today's real estate market. The truth is the lenders are cracking down and are looking for the best qualified borrowers, shoving people out of the marketplace for purchasing their first home.

Lenders are requiring much higher down payments, better financial documentation and higher credit scores than they did during the boom, cutting back on the number of potential buyers.

Let's talk about affordability and who is purchasing homes today. Roughly 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB).

Personally, I feel that the media is the problem with real estate today. They make everything sound 1000 times worse!!!  If we did have such negative press, the market would be able to hold its own!! This is a great time to purchase a home..... prices are low and there are so many mortgage programs out there if you have a decent credit score, especially for first time buyers.

Looking for a lender, call me at 215-576-8666 and I can recommend you to the best mortage company that fits your needs.

Home Equity Line Of Credit Freeze (HELCOs)

by Diane Cardano & Team

Dear Friends

There’s a growing trend among lenders that I feel compelled to tell you about.

Several major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOCs) – and I don’t want you to be caught off guard by this development.

Don’t Get Burned by the HELOC Freeze

HELOCs, though secured by your real estate, are treated by lenders as consumer credit. And just as a lender can revise the terms of your credit cards, or even cancel them, the same can be done with your HELOC.

Previously, HELOC withdrawals were usually only frozen for reasons such as bankruptcy, declining credit and payment problems.

While these events can still cause a freeze, there’s another factor that lenders are considering more often today: the value of your property. You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value.

If you’re in a market that has seen real estate values decline, then access to your HELOC may be at risk. Your financial security and success are my highest priority. Please call me for a Lender Referral to discuss your options in this rapidly changing marketplace.

 

FHA Loans Are Better Than Ever

by Diane Cardano & Team
 Looking for A Mortgage, FHA may be the right way to go!!! Check it out and call Diane & The Team for an FHA lender referral!!!

The reduction in upfront mortgage insurance (MI) fees on FHA (Federal Housing Administration) loans isn’t the only good news for your aspiring homebuyers. Mortgage companies are now offering the FHA Hybrid ARMs in addition to the traditional fully amortized fixed loan products to best meet your client’s needs.

FHA loans provide many benefits; including less out-of-pocket cash required from the borrower:

  • 2/1 buydown option – customers must qualify at Note rate
  • Minimal cash neededJust a 3% minimum investment that can come from a variety of sources. 
  • Alternative credit references acceptable – utility payment history, insurance premiums.    

  • Increased loan limits: FHA has increased the maximum loan limits determined by median house prices for that area and will vary from county to county.

  • ExpandExpanded loan products: Fixed rate and FHA Hybrid adjustable rate mortgage (ARMs).
  • Reduced appraisal requirements: FHA permits an “as-is” appraisal for existing properties and eliminates required inspections for wood destroying insects/organism, a water well (individual water system), and for a flat roof when certain conditions are met (See Bank of America for details).  

  • Streamlined refinancing: Less documentation and automated underwriting for faster approvals

     

 

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Diane Cardano & Associates
CARDANO Realtors
1021 Old York Road, Suite 401
Abington PA 19001
Office: 215-576-8666
Fax: 215-576-8677