Every day when you turn on the TV you are bound to hear someone talking about the “Stimulus Package” and how it supposed to help home owners buy homes or refinance their existing mortgages but few people explain how this applies to the average person in terms everyone can understand. Today I want to talk about two specific programs, the “First Time Home Buyers Tax Credit” and the DU Refinance+. These are two of the better parts of the “Stimulus Package” and I would like to explain how these could help you or someone else you know, like and trust.
The “First Time Home Buyers Tax Credit” in very simple terms is a rebate you get from the government for buying a home. Now this rebate does come with a few restrictions. First, you must be a “First Time Home Buyer”. That means you cannot have owned a property in the last 3 years, so just because you may have owned a home in the past doesn’t mean you can’t qualify for this credit. Second, if you purchase a home for $80K or more you will get the full tax credit of $8,000; if you purchase a home for less than $80K, you will receive 10% of the purchase price in a tax credit. In addition to the previous two restrictions there are some income restriction that you will want to talk to you tax advisor about. But here is the beauty part of this tax credit too. The tax credit is real money in your pocket. This is not one of those programs where they will reduce your taxable income by $8,000 so you pay fewer taxes. If you are scheduled to get a refund of $500 on your taxes, you will get a refund of $8,500 instead. Now since most of you have probably already filed you 2008 tax returns you have two options when to collect this credit. You can wait until you file you 2009 tax returns and you will get it then or you can amend your 2008 tax returns and get it this year.
If you have been considering buying a home, now is the perfect time. Longmont’s real estate market has been stabilizing well and the state as a whole has actually seen its first decrease in foreclosures since they started monitoring them back in 2003. But you cannot wait forever. If you want to qualify for the “First Time Home Buyers Tax Credit” you must purchase a home before December 1st, 2009.
The DU Refinance+ program is designed for those who currently own a home and would like to refinance to a low interest rate but might not be able to because their property values have declined. There are a lot of restrictions to this program so I will cover some of the big ones but each loan is looked at case by case. First, to qualify for this program, your current first mortgage must have Fannie Mae as its servicer. The easiest way to find out if your mortgage is owned by Fannie Mae is to call The Kunselman Team and we can look it up for you. (Please note that even though you don’t make your mortgage payments to Fannie Mae, that doesn’t mean your loan is not owned by them.) If Fannie Mae owns your mortgage, the second question is “Does your first mortgage currently or in the past had mortgage insurance on it?” If the mortgage had mortgage insurance on it at any point, you do not qualify, but if your first mortgage is 80% of you homes value or less you may qualify.
This program is particularly helpful for those who have a first and second mortgage on their home. Many people with first and second mortgage currently owe more than their home is worth. By current lending standards, these people would not qualify for a refinance but with the DU Refinance+ Program, as long as their first mortgage is not more than 105% of their homes value, they may be able to qualify for this refinance to lower their monthly payments. This is not a cash out refinance! You can only refinance your existing mortgage and the loan closing costs. If you have a second mortgage, that company must agree to the terms of the new loan but since we are usually bettering your situation, many are being pretty cooperative.
If you or someone you know, like and trust would like to see he or she qualifies for either of these fantastic programs, please contact Luke at Luke@TheKunselmanTeam.com or Shelley at Shelley@TheKunselmanTeam.com.
