Tax Deductions for Homeowners

Home ownership has always been a source of tax benefits and deductions. Whether you purchased your first home in 2010 or have been a long time homeowner, remember the following items when doing your taxes or talking with your tax accountant. Any or all of them may be deductible for your 2010 tax year:

• Mortgage interest.
• Points purchased.
• Private mortgage insurance.
• Real estate and property taxes.
• A portion of your moving expenses if you relocated for work.
• Home improvements made specifically for medical reasons.

Restrictions may apply for who may take deductions for some of these items. Talk with your tax accountant or visit the IRS website for more information.

Buying a home in December? Are you crazy?

Real estate wisdom has always been that things are wicked slow from Thanksgiving through New Year's. Buyers have a lot going on in their lives, and looking at homes bumps way down on the list unless a buyer really needs to move. We tend to warn our home sellers that any buyer looking at this time of year is extremely serious, so homes must be staged well for every showing.

Buyers can use this conventional wisdom in their favor, making this a great time of year to purchase a home.

Why?

So few buyers want to look right now. Home sellers are aware of this fact, and so they are more likely to work with an offer and negotiate than they might be at other times of year. If sellers get an offer in early or mid-December, they are highly aware of the fact that this will likely be the only offer they see for the next four to six weeks. This is another one or two mortgage payments or a delay in a seller's own relocation. Sellers do consider these extra costs as they negotiate.

If you can fit the time to look at homes into your schedule, give some thought to writing an offer in December. It can be just the edge you want in the negotiation process.

Congratulations

Congratulations on your first home, Cori! We hope that you will spend many happy years there.

If you dream of a photo of standing in front of your first home in the Monroe, WI area, give Brenda or Luis a call or check out our website to send us a message. We will be happy to work with you to help you find just the right home, whether it is your first home or if you are upsizing or downsizing.

Financing options

As the consumer lending market tightens, home buyers who do not have at least a 5% down payment for a home are finding it difficult to obtain financing for a home purchase. Traditionally, these buyers have had the option of getting an FHA loan if they have a 3% downpayment or utilizing Rural Development for their mortgage if they don't. Rural Development is currently not lending, however. Legislation is in the works to continue funding this government program, but until then, they are not lending.

Fortunately, another government agency has begun lending once again. WHEDA (Wisconsin Housing and Economic Development Authority) had suspended lending last year due to issues with the private mortgage insurance market. WHEDA loans are once again an option for buyers now, though.

WHEDA's newest loan program is WHEDA Fannie Mae Advantage. This loan allows buyers to purchase a home with as little as $1,000 down. WHEDA Advantage has a competitive, low interest rate and does not require any private mortgage insurance, making for a very affordable mortgage payment for consumers.

WHEDA loans are a very savvy option for home buyers. A home seller who is given an offer with a WHEDA pre-approval letter can have a measure of confidence in the offer. WHEDA does a very strict pre-approval process, fully documenting a buyer's ability to afford a mortgage before the pre-approval is given. WHEDA also requires home buyer to complete an education course before the loan is given, helping to insure that a buyer understand the mortgage loan they are taking out.

All the local banks are able to work with WHEDA, so talk with the mortgage broker at your bank about this great option.

On Using a Buyer's Agent

I came across this video earlier today, and I thought that it illustrated very nicely some of the reason to use a Buyer's Agent when purchasing a home in Green County or anywhere else. Wisconsin laws do allow for a Buyer's Agent, and unless you have a Buyer's Agency Agreement, we as Realtors are obligated to put a Seller's interest first.

Call to Action

The $8000 First Time Home Buyer's Tax Credit has been a boon to many across our county this year. However, this credit expires on November 30, 2009. The National Association of Realtors is encouraging people to contact their congressional representatives and urge them to vote to extend this credit.

Several analysts credit this program with helping home prices and home sale rebound in many parts of our nation. However, there is concern about what will happen when the credit expires. To quote a recent article in the Washington Post, "If the first-time homebuyer tax credit expires as scheduled on Nov. 30, many analysts expect a drop in home sales and prices, though they disagree on how big the drops will be. The situation looks even more dire once swelling unemployment numbers and related delinquencies and foreclosures are factored in."



If you would like to take action and send a message to your representatives, this link makes it easy for you. Put in your name, address and email address, and the system will send out a message to your representatives.

First Time Home Buyer's Tax Credit

60 days and counting for the First Time Home Buyer's $8000 tax credit...

This video is from last spring, but it does a nice job covering information on the tax credit itself. Time is running out, so if you want to take advantage of this tax credit, contact us today!

Don't miss out on the tax credit

August 28 already. Back to school time is here. Labor Day is just around the corner. How quickly this year has flown. Four more months left in the year.

Three more months before the $8000 first time home buyers tax credit expires.

Three months. That is about 90 days. 95 days including today to be specific.

Are you or someone you know hoping to take advantage of this tax credit? Time is running out. You must close on a home on or before November 30, 2009 in order to claim this credit.

Considering that the average closing happens about 30-45 days after an offer is accepted, there is not a lot of time left to find the perfect first home. If you are writing an offer on a short sale home, it can easily take 60-90 days to close, sometimes more.

Now is the time to be looking for your home if you want to take advantage of this offer. There are great homes out there, and with inventory very high right now, local sellers are willing to negotiate considerably more than they ever have in the past.

Give me or Luis a call if you are thinking of looking for a home. We will be happy to show you what is currently available in the area, and we can help you connect with a reputable mortgage banker who can help you figure out what you can afford in a home. Our market has houses from under $75K to hundreds of thousands, and everything in between. People start at all price points, and each buyer is valuable to us.

95 days and counting. Don't miss out on this credit; call us.