February 2009

Fannie Mae and Freddie Mac Raising Fees

Just read that beginning April 1, 2009 Fannie Mae and Freddie Mac will be raising the fees and tightening rules for credit scores and down payments.

What does this mean? Higher closing costs or interest rates for the consumer, in short.

Whenever I have someone putting down 25% on a house, that’s kind of “out of the norm”. It seems most folks put down less. (Whether it’s good or bad, I leave for you to decide. It’s just a fact I’m stating).

If you were buying a $200,000 house and putting down $50,000 (25%), wouldn’t you feel that is pretty good hefty down payment? Hey! At least you’d have some equity in the home! Under the new rules that are slated to go into effect on April 1st (as far as I know, it’s not an April Fool’s joke), the buyer of that house would be hit with a 1.5% “delivery fee” at closing.

I’m guessing that this 1.5% “delivery fee” will based on the loan amount and not the sales price. So, basically these 1.5% “delivery fee” would add an extra $2,250 in closing costs to that home buyer!

But wait that’s not all!

This applies to those with what has been historically considered good to great credit scores too! Although, the higher the FICO score the less you’ll pay of the “delivery fee”.

For example, if you have a credit score of 699, you’d pay 1.5% additional in fees. If your credit score is 700-720, you’d pay .75% additional in fees. If your credit score is 739, you’d pay .25% in additional fees! Kind of sounds like a tax doesn’t it?

Here’s a link to a story about it: Fannie Mae and Freddie Mac Fees

213 Acres for Sale East of Waco

I was just informed that there’s 213 acres for sale in the Mt. Calm area for $2,500 an acre. As soon as I get more details, I’ll pass them along.

Here’s what I have so far though:

• 4 Tanks
• Wildlife: Quail, Deer, Fish, etc…
• Working Ranch
• Barn
• Cross Fencing

If you know someone that is looking for a lot of acreage, give me a call and I’ll get you more info:

Gary Russell
(254) 498-4276

$15,000 Home Buyer Tax Credit Becomes $8,000

The Senate version of the stimulus package had a $15,000 home buyer tax credit available to any home buyer that bought a home before the end of the year.

In Senate and House negotiations, that credit was changed considerably from the $15,000 for any home buyer, back to applying only to first time home buyers. The amount was dropped too. 

Just for the record, the gov’t classifies a first time home buyer as anyone who has not owned a home in the last 3 years.

The gist of the tax credit is that first time home buyers can now get a tax credit of $8,000. The new kicker? If they live in the house for at least 3 years, those home buyers who took the credit will NOT have to pay it back!

I’m still trying to find out, but from what I’ve heard so far, is that this will NOT be retroactive. Meaning, if you already closed on a house and took the $7,500 tax credit plan for first time home buyers, then you’ll will still have to pay it back to the I.R.S. (interest free). You will NOT automatically be converted to the new deal.

Like I said that’s what I’ve heard so far, but I’m trying to find out for sure.

Of course, the new tax credit deal won’t take effect until a stimulus package is passed and signed by the President.

$15,000 Tax Credit Proposal

Okay, the Senate passed a bill that containted the $15,000 tax credit for home buyers. Of course there’s a lot of misinformation regarding the new credit that would replace the current $7,500 incentive for first time home buyers.

The Senate backed bill has yet to be passed the House, but it’s apparent that a new home buyer tax credit will take shape in one form or another.

Here’s another blog that has a FAQ about the tax credit item in the Senate verison of the stimulus bill:

$15,000 Tax Credit FAQ

Also, here’s a copy of the amendment:

Amendment

It’s a “tax credit”, meaning that any home buyer won’t just get a check from the gov’t. It will be tied to your tax liability. The first link in this post has some really helpful info.

Of course, the amendment (and the bill) can change dramatically before it becomes final.

A New Home Buyer Tax Credit

I’ve talked about the first time home buyer tax credit that’s underway right now. This credit allows first time home buyers to claim a tax credit of up to $7,500.

A new and “improved” tax credit has made its way into the stimulus plan we’ve been hearing so much about. If/when the stimulus bill is passed, this new tax credit will replace the old one. Here are some quick facts:

• Up to $15,000 tax credit for ANY home buyers, not just first time home buyers
• You’ll be able to claim the credit on your 2008 tax return
• You won’t have to pay it back

Of course there are some restrictions. The tax credit is equal to 10% of the home sales price or $15,000, whichever is less.

It’s for principal residence only (not investment property). If you sell it before 2 years, you’ll have to pay back the credit.

The stimulus plan is being debated in Washington right now, but so far, it seems most of the politicians are behind the home buyer tax credit.

Of course, the home buyer tax credit could change or get deleted entirely before the stimulus plan is passed and signed by the President.

I’ll keep you updated on it.