Cynthia's Chat

14809 Glenmark in Glen Eagles

2:00 pm to 4:00 pm

From Memorial and Western, go North to Glen Ridge Drive.  Turn East to Glenmark. Turn left on Glenmark to home.

Fabulous remodel.  Spacious rooms throughout.  Decorator colors, high quality carpet, new tile, granite countertops and stainless steel appliances.  2-way fireplace between family room and kitchen.  Corner fireplace and built-ins in formal living room.  Fabulous master suite with his and hers closets, double vanities and access to patio.

I've got information for you!!!!!

As you all have probably have heard, the mortgage credit market is changing.  The "easy" loans are gone, and 100% financing is scarce.

Many 1st time home buyers, in the past , used private downpayment assistance programs to finance their downpayments.  As of October 1st, those programs will be gone.

Spirit Bank has a unique downpayment assistance program that passes FHA guidelines now and after October 1st.  I've asked Spirit Bank's mortgage loan officer to explain the Tax Credit and his down payment assistance program.

This information is lengthy, but please bear with me.  The downpayment assistance information is at the bottom.  Please read this and pass the information on to any "first time" home buyers you may know.  And 1st time buyers are those who have not owned a home in the past 3 years.  The definition is in the first part of this information.

Let's get together and talk!

Spotlight – Housing and Economic Recovery Act of 2008

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, you are advised to consult a qualified tax or legal professional about your unique situation

1. Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.

2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

3. How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.

4. What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.

5. Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

6. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

7. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.

8. Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.

Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.

Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

9. Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.

10. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.

11. I heard that the tax credit is refundable. What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).

12. What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.

13. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.

14. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.

15. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

16. Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

17. Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.

18. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.

19. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

20. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

21. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

Source:  http://www.federalhousingtaxcredit.com/faq.php#1

Now for Spirit Bank's Down Payment Assistance Program:

Spotlight-- On Down Payment Assistance!
 
SpiritBank Mortgage is pleased to announce our participation approval in two privately funded Down Payment Assistance programs made possible by our participation in various affordable home lending programs.  Both loan programs seek to serve underserved markets in assisting more buyers in the purchase of an owner occupied home.
 
Each program provides down payment/closing cost assistance money up to either 7% or 8% of the Purchase Price.  Both FHA and Conventional loan products are available and each has its own income restriction rules-- one is based on the number of persons in the household while the other is based on applicant income.  Unlike a Bond Loan program both programs' assistance is non-forgiveable which means the borrowers are re-paying the funds for the down payment assistance however it's amortized on a long rate note at a very reasonable rate of interest which enables them to have an affordable house payment while coming up with very little, if any, out of pocket funds.
 
To my knowledge, SpiritBank is one of very few participants in these programs in Oklahoma.  Our continued commitment to bring home purchasing solutions to consumers has lead us to pursue these relationships with our strategic lending partners.  With the official demise of Zero Down loans earlier this year, these Affordable Housing programs are the right product for many who otherwise wouldn't have the ability to own their own home.
 
Call me for more information on these and other exciting mortgage programs!

Kenneth Wohl, Spirit Bank

405.715.7082 

Sunday, August 17th,   2:00 pm to 4:00 pm  Cheyenne Ridge

Look for the signs going into Cheyenne Ridge East of Bryant on 33rd and South of 33rd on Bryant.

2011 Sumac Circle - South of 33rd on Cheyenne Ridge.  Turn left on Sumac Circle

My listing will be open and this is a 'must see" property.  It is a gem in this established Southeast Edmond neighborhood.  The owner has taken care of the big ticket items this year by replacing the roof and heat & air.  He also replaced the dishwasher with a top of the line stainless steel model.

The home has 4 large bedrooms, a spacious family room with vaulted ceilings.  One wall features the fireplace with built-in bookcases.  The formal dining room has wood floors and French doors.  The kitchen is huge and has a good sized eat-in area.

A nice sized storage building is in the back yard.  There is also a separate fenced in area for a dog run or a garden spot.

The home is just a 5 minute walk to both Chisholm Elementary or Cimarron Middle Schools.

Sunday, August 10, 2008 

2 pm - 4 pm

14809 Glenmark in Glen Eagles

Enter Glen Eagles off of Western just North of Memorial Road.  Turn left on Glenmark to home.

This is a fabulous remodel priced at $299,000.  3 bedrooms, two large living areas, 2 dining and 2.5 baths. 

Kitchen features granite countertops, all NEW stainless steel appliances, including refrigerator.

High quality carpet and tile throughout.

See you there!

Edmond has had Crazy Days!  So now we know that we are in the waning, hottest part of the summer.  We are expecting record heat this week, which only means I will spend more time under the big shade tree in the air conditioned RV by the pond.

What are your plans to cool off these next few days?  Do you have an old innertube?  If so, come on down and jump in the pond.  But only an old innertube will work  - possibly one with one or two patches.  Don't bring your fancy swimming duds.  The pond is kind of dirty.

The other day we saw a grass carp.  It was at least 3 feet long.  Then we caught a seven and a half pound catfish.  Bring your fishing poles and bait.  You catch the fish and I'll fry it up!

Or, I could put you in my air-conditioned car and we could look at houses.  It's still a bit of a buyer's market out there and there is a good supply of homes.  We can drive through Sonic and order Route 44 drinks to last us through the afternoon.

So really, let me know what you have done this summer.  Have you taken a vacation?  Where?  Did you plant a garden?  Have you had company?  Did you complete a home improvement project?  And are you ready for football season?  It's almost here, with the promise of cooler days.