While you’ve probably heard a lot in the media about the government’s efforts to rejuvenate the housing market with the first-time home buyer tax credit, you might have missed the fact that the most recent expansion of the legislation also includes a $6,500 credit for current homeowners who want to purchase a new home…commonly referred to as “moving up.”
I’ve worked with many homeowners who have wanted to move to a new home over the past year, but have stayed put due to a lack of confidence in the market. Now, however, thanks to the tax advantages of the Worker, Homeownership, and Business Assistance Act of 2009, these homeowners are moving off the sidelines and purchasing the homes they’ve always wanted.
But the time to act is now—there is only a short window of opportunity! The move-up buyer credit expires in April of 2010, which means you must contract and close on your home purchase by June 30, 2010. As you know, selecting a home is not a simple process, so start your search now so you don’t miss the deadline.
For starters, here are the key facts you need to know about the move-up buyer tax credit:
1. A qualified current homeowner who wishes to move to a different home (a “move-up” buyer) must have owned and resided in their residence for five consecutive years out of the last eight. It’s not enough that you have been homeowners for five years—you must have been in the same home for five consecutive years.
2. Single taxpayers with incomes up to $125,000 and married couples with a joint income up to $225,000 qualify for the full tax credit. According to Goldman Sachs, these income limits make approximately 70% of current homeowners eligible for the credit.
3. The maximum credit amount for current homeowners is $6,500. Under the new legislation, a tax credit may only be issued for homes purchased for $800,000 or less.
4. Even though the term “move-up” is used to describe these buyers, the credit is not predicated on buying a home of higher value than your current home.
5. Move-up buyers are not required to sell their current home to qualify for the credit. They must reside in the new home for at least three years, but they can keep their existing home and either leave it vacated or use it for rental purposes.
These are just a few of the key facts surrounding the move-up buyer tax credit. If you would like to find out more, including whether or not you are eligible for the credit, please e-mail me. Be sure to forward this blog to all your homeowner friends so they can take advantage of this once-in-a-lifetime opportunity.
Thursday, December 17, 2009
Friday, December 4, 2009
Four Ways to Optimize Your Credit Profile
Our next door neighbor the other day was out buying a new car. Normally, in the past he could walk in and drive out in whatever he wanted. But with the change in credit and the way it is viewed now, his trip to the dealership took a lot longer than he expected.
Whether you’re looking for ways to dig out of your financial hole or ways to avoid getting into one, the importance of actively managing your credit and debt profile has never been greater. (Just ask my neighbor.) Americans have become well-versed in asset management but not necessarily liability management. Until recently, easy access to credit has made our current generation feel immune to the real risks of overextending your credit.
In today’s difficult economic environment, as banks get more restrictive about who gets approved for credit and which consumers get the preferred rates, as a member of The Top 5 in Real Estate Network(R), I am advising all my clients to spend more time analyzing the types of credit they have and how it is used. The reality is, we all need to change our behaviors and adapt to the realities of the current environment. When it comes to liability management, here are some simple first steps to take from credit consultants, Approvalguard.com:
1. Understand How Credit Works. Now is not the time to be content with understanding 80% of what you need to know about your credit. Ninety-four percent of consumers are challenged with understanding the basics of how personal credit works. In most cases, they build credit over a lifetime of trial and error. Invest some time in researching and understanding the current credit climate and/or contact your financial advisor or a trained credit professional.
2. Continually Evaluate and Monitor Your Current Credit Profile. The second step is to evaluate your current credit and debt profile and establish a plan based on your short- and long-term credit needs. Continually monitoring your credit report and profile is no different or less important today than getting a physical exam by your doctor.
3. Optimize Your Credit. Each of your debts should be periodically reviewed and analyzed. Are there options you can take to improve your overall credit profile so that you’re more desirable to creditors for their preferred interest rates? Should you consolidate some of your debt? Once you strengthen your credit and debt profile, do you have options on your home, auto and credit cards to negotiate lower interest rates and terms that would save you money monthly?
4. Rethink New Purchases. Excellent credit is like an insurance policy. When you need to use it, you want to qualify for the preferred interest rates and terms. Maintaining your credit “insurance policy” is critical for special purchases like a home, car or major appliances when needed. Don’t wait until there’s an immediate need because your chance of making a material change in your profile overnight is very difficult.
Remember, the credit environment just isn’t what it used to be. There has never been a more critical time to build, optimize and manage your personal credit and debt profile. If you would like to learn more, please e-mail me, and be sure to pass this blog along to your friends, family and colleagues. We can all benefit from this important information.
Whether you’re looking for ways to dig out of your financial hole or ways to avoid getting into one, the importance of actively managing your credit and debt profile has never been greater. (Just ask my neighbor.) Americans have become well-versed in asset management but not necessarily liability management. Until recently, easy access to credit has made our current generation feel immune to the real risks of overextending your credit.
In today’s difficult economic environment, as banks get more restrictive about who gets approved for credit and which consumers get the preferred rates, as a member of The Top 5 in Real Estate Network(R), I am advising all my clients to spend more time analyzing the types of credit they have and how it is used. The reality is, we all need to change our behaviors and adapt to the realities of the current environment. When it comes to liability management, here are some simple first steps to take from credit consultants, Approvalguard.com:
1. Understand How Credit Works. Now is not the time to be content with understanding 80% of what you need to know about your credit. Ninety-four percent of consumers are challenged with understanding the basics of how personal credit works. In most cases, they build credit over a lifetime of trial and error. Invest some time in researching and understanding the current credit climate and/or contact your financial advisor or a trained credit professional.
2. Continually Evaluate and Monitor Your Current Credit Profile. The second step is to evaluate your current credit and debt profile and establish a plan based on your short- and long-term credit needs. Continually monitoring your credit report and profile is no different or less important today than getting a physical exam by your doctor.
3. Optimize Your Credit. Each of your debts should be periodically reviewed and analyzed. Are there options you can take to improve your overall credit profile so that you’re more desirable to creditors for their preferred interest rates? Should you consolidate some of your debt? Once you strengthen your credit and debt profile, do you have options on your home, auto and credit cards to negotiate lower interest rates and terms that would save you money monthly?
4. Rethink New Purchases. Excellent credit is like an insurance policy. When you need to use it, you want to qualify for the preferred interest rates and terms. Maintaining your credit “insurance policy” is critical for special purchases like a home, car or major appliances when needed. Don’t wait until there’s an immediate need because your chance of making a material change in your profile overnight is very difficult.
Remember, the credit environment just isn’t what it used to be. There has never been a more critical time to build, optimize and manage your personal credit and debt profile. If you would like to learn more, please e-mail me, and be sure to pass this blog along to your friends, family and colleagues. We can all benefit from this important information.
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