Missoula MT real estate Blog

Missoula Real Estate Blog

Update on Missoula's Economy

December 23rd, 2008 1:29 PM

Dr. Larry Swanson with the O’Conner Center for the Rock Mountain West was in Missoula last week speaking about the State of the Missoula’s economy compared to the rest of the country. The focus of the presentation reaffirmed what many of us have been thinking. Although we have noticed a decline in home sales over the last year, what is happening nationally is not happening in our local market. I have attached Dr. Swanson’s presentation to this Blog. Please feel free to comment.

Dr.Larry Swanson's Slide Show - Missoula Economy

“It’s A Great Life”

Jeremy

Posted by Jeremy Williams on December 23rd, 2008 1:29 PMPost a Comment (0)

1st Time Home Buyers Tax Credit

December 2nd, 2008 3:53 PM

1st Time Home Buyers Tax Credit

“For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.”
-www.federalhousingtaxcredit.com

The Housing and Economic Recovery Act of 2008 was signed into law by President Bush on July 24th, 2008. This bill is over 700 pages long, and contains a number of provisions meant to stimulate and strengthen the housing market. The centerpiece of the bill is the First Time Homebuyer Tax Credit, which gives first time homebuyers a federal fully refundable tax credit of up to $7,500 if they buy a primary residence between April 9th of this year and June 30th of 2009.

Here are some of the key points:

· To qualify for the credit you must be a first time homebuyer. A first time homebuyer is defined as anyone who has not owned a home within the past three years.

· A single person must earn an annual income of less than $75,000, and couple’s annual income can’t exceed $150,000. (Those whose incomes exceed the limit may still be eligible for a partial credit.)

· The tax credit is equal to 10% of the purchase price of the home, but is capped at $7,500. In other words to claim the full credit the home must cost at least $75,000.

· Tax payers are eligible for the entire tax credit regardless of their tax liability.

· The $7,500 must be repaid over the course of 15 years at zero interest. The first payment is due 2 years after the credit is claimed. A tax payer who claims the credit on his 2008 tax return will make his first $500 payment when he files his 2010 return. When the home is sold the balance of the credit must be repaid, provided the home sells at a sufficient profit. If it does not, the balance of the credit owed may be reduced or forgiven.

In short this is a once in a lifetime chance, and the window of opportunity is closing. Would be homebuyers have just over seven short months to purchase property, which is not much time considering that the average homebuyer takes 6 to 9 months to research property and get their finances in order prior to buying.

As a mortgage lender I have been disappointed at the lack of publicity that this exciting bill has received. A number of Realtors and lenders I’ve talked with overlook the possibilities the tax credit creates. I’m often asked, “What’s the big deal? It’s just an interest-free loan.” The big deal is that $7,500 is enough to enable many people to buy who otherwise wouldn’t! A few ways my customers are using the credit include:

1) Pay off a car loan to decrease monthly payments.
2) Offset the cost of daycare following the birth of a new baby.
3) Make improvements to the home.
4) Put the money in savings for emergencies.
5) Repay a relative who “gifted” the money for a down payment.

I know that there is a lot of negative news out there right now. As I write this article the stock market is in a virtual free fall, the housing market has been weakening for some time now, and don’t even get me started on the lending industry! But here’s the exciting news: interest rates are still very good, there are lots of reasonably priced homes to choose from, and despite what the media would have you believe, there are still very good loan programs available to first time homebuyers with little or no down payment. And now we have the First Time Homebuyer Tax Credit, which could be just the tool we need to help our struggling housing market get back on its feet.

Lisa Baker
Home Loan Consultant
CMD 1440 - Missoula, MT PB
Countrywide Bank, F

406-721-0616 Office
406-370-2780 Cell
406-721-3895 Fax 1715 S Reserve #A
Mail Stop: MSN-BR1440
Missoula, MT 59801
Lisa_Baker@countrywide.com

Posted by Jeremy Williams on December 2nd, 2008 3:53 PMPost a Comment (0)