By JON PRIOR
November 6, 2009 3:44 PM CST

President Barack Obama signed the “Worker, Homeownership and Business Assistance Act of 2009” into law on Friday, extending the first-time homebuyer tax credit as well as certain jobless benefits at a time when the US unemployment rate has officially reached 10.2%.

With the first-time homebuyer tax credit originally scheduled to expire on Dec. 1, 2009, HR 3548 now allows first-time buyers to claim 10% of the purchase price of their home, up to $8,000 for single or married taxpayers filing jointly, if they close on the purchase by midnight June 30, 2010. Taxpayers must purchase or be locked into a contract to close before midnight on April 30, 2010.

The credit has provided more than 1.4m to taxpayers as of September 2009, according to the Internal Revenue Service.

New provisions accompany the extension. The credit is allowed for those with incomes up to $125,000 or $225,000 for taxpayers filing jointly. The credit reduces for those with incomes between $125,000 and $145,000 - or $225,000 and $245,000 if filing jointly. Anyone with an income higher than $145,000, $245,000 if filing jointly, cannot not receive credit.

Taxpayers who have lived in their home for five consecutive years during the eight years before closing on a new home may qualify for a reduced credit - $6,500 joint filers and $3,250 for those who file jointly.

The bill passed the House of Representatives on September 22, 2009, with 331 votes for and 83 votes against. When the bill landed in the Senate, it passed with 98 votes for and 0 votes against.

From the USFA “Tribute to Heroes” campaign

SMOKE ALARMS

· Have a working smoke alarm on each level of your home and outside bedrooms.

· Test smoke alarms monthly and change batteries at least once every year.

· Consider buying a lithium battery powered smoke alarm, which may last up to ten years with no battery change.

· Install smoke alarms away from air vents.

· Install smoke alarms on the ceiling or wall, at least 4 inches from corners.

· When affixed to walls, smoke alarms should be between 4 and 12 inches from the ceiling.

· Never disable or remove smoke alarm batteries.

ESCAPE PLANNING

· Develop a fire escape plan with your household and practice often.

· Know two ways to exit from every room in your home.

· Make sure safety bars on windows can be opened from inside your home.

· Crawl low, under smoke.

· Feel closed doors. If hot, use another exit.

· Identify a place to meet household members outside. Never re-enter a burning building.

· Escape first and then call for emergency assistance.

FIRE SAFETY WALK THROUGH

· Keep clothes, blankets, curtains and other combustibles at least three feet from space heaters.

· Place space heaters where they will not tip over easily.

· Have chimneys cleaned and inspected annually by a professional.

· Clear the area around the hearth of debris, flammables and decorative materials.

· Always use a metal mesh screen with fireplaces and leave glass doors open while burning a fire.

· Keep clothes, towels and other combustibles away from stove burners.

· Never leave cooking unattended.

· Be sure your stove and small appliances are off before going to bed.

· Check for frayed wires and do not run cords under rugs or furniture.

· Never overload electrical sockets.

· Keep lighters and matches out of the reach of children.

· Never leave cigarettes unattended.

· Never smoke in bed.

The loan modification process can be frustrating and confusing for many distressed homeowners. If you are considering contacting your lender about a loan workout to avoid foreclosure, you need to get as much information upfront as possible so you will be prepared and able to present your case in the best possible light. Programs and guidelines are changing and it is getting much easier for homeowners to get the help they need. To help you understand how the process works and what you can expect, here are the Top 10 Questions and Answers:

1. What exactly is a loan modification? A loan modification is a permanent change in one or more terms of a borrower's home loan, allows the loan to be reinstated, and results in a payment the homeowner can afford.

2. Can the lender include late charges in the Loan Modification? The federal plan mandates that the bank waive any administrative charges, late fees and penalties when offering a loan workout.

3. How will the new government programs help me get a loan modification? The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who offer a loan workout to their clients. Now, the banks will have a monetary incentive to offer help to qualified borrowers. In addition, homeowners who pay their new modified payments on time will be eligible up to $5000 credit to their loan balance.

4. How do I know if I will qualify for a loan modification? The number 1 criteria your lender is looking at is your ability to make the new modified payment now and in the future. You need to supply the lender with proof of your income, along with a complete and accurate financial statement detailing your income and expenses to show them that if granted the modification, you will be able to afford the new, lower payment. You must also be able to demonstrate that you are facing a financial hardship-lower income or higher expenses for example.

5. Do I have to be currently delinquent on my payments to get a loan modification? President Obama has included a special incentive under the Home Affordable Modification Plan that will pay lenders an extra bonus for reaching out to homeowners not yet delinquent but at risk in the future. The goal is to help borrowers before they fall into default.

6. What is an acceptable Hardship situation? Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification. A compelling hardship letter included in your application is a very important part of a successful application.

7. Will a loan modification help me stop foreclosure? Yes, that is the goal-by working with your lender to find a loan workout solution, your loan is brought current and the foreclosure process is halted.

8. Can my missed payments be added back into my new loan modification? Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.

9. Can I do a loan modification myself or should I pay someone to represent me? That is entirely up to you and your comfort level with dealing with your lender. The Treasury Department is strongly discouraging the payment of any fee to a third party to represent you in a loan workout. Regardless of what you decide, the first thing you should do is learn all you can about the process, your legal rights, and what it takes to get your application approved. An informed homeowner is harder to take advantage of and will have a much greater chance of success.

10. So how do I get started to modify my loan? Before contacting your bank's loss mitigation department or a loan mod company, do your homework-learn as much as you can about the loan modification process so you can make informed decisions.

"There are a lot of answers to that question," says Stephen Gidus, co-owner of PSG Construction in Orlando.

It's worth it when it makes life more comfortable, convenient and aesthetically pleasing for the homeowner — especially if the homeowner plans to be in the home to enjoy the improvements for years to come, he said. It also is worthwhile if it adds value to the home, and is likely to be attractive to future buyers.

Projects that traditionally boost a home's value and appeal include kitchen and bathroom remodels, and the renovation or addition of a porch, says Scott McCurdy of Coastal Reconstruction in Orlando.

Simple additions that add character to a home also increase its resale value a little. Interior and exterior paint can add "a lot of zing especially in colors that are currently popular, such as greens and black.

Other smaller projects include installing trims such as crown moldings, wider baseboards and tile back splash; changing the hardware on doors; changing toilets, sinks and bathroom hardware; installing new appliances; upgrading countertops; or reworking cabinets by painting them or replacing the doors and hardware.

Gidus suggested two other remodel projects that boost value: the addition of storage space and a multipurpose room.

"Here in Florida we don't have basements or large attics. Extra closet space is very valuable. It has a lot of appeal for resale."

Also, flex-space at the back of the house or upstairs is great. "Based on the size of the family and where they are in the growth cycle, it could be used as a playroom, recreation room, home office, exercise room or entertainment space," says Gidus. "And based on your budget, you could include built-in bookcases, entertainment center, fireplace, full- or half-bath, wet bar, under-counter fridge and a porch or lanai for outdoor living."

But the kitchen is still king when it comes to adding value to a home, followed by the bathroom.

"Those rooms are designed for today. The look and functionality of cabinets, appliances, tile, lighting fixtures, et cetera, becomes outdated fastest," says Gidus.

Kitchens, in particular, are changing — in looks, layout and function, says McCurdy.

"We're finally realizing the kitchen has always been the main gathering point in the home. But until recently, most kitchens have been inadequate to take a crowd," he says. A renovation project can expand the kitchen or open it up to an adjoining space by removing a dividing wall.

Other popular upgrades include commercial-grade stainless-steel appliances; a computer desk; comfortable seating; better-quality cabinetry; granite countertops; and even a fireplace.

A remodeled bathroom usually combines luxury with function, says McCurdy. "It's a place to retreat and unwind."

Features that increase a bathroom's appeal include larger showers with rain shower heads, steam showers, body sprays, heated floors and hinged glass doors or partial shower walls. Also, soaking tubs instead of jacuzzis, more windows and skylights to let in sunlight, and more efficient, quieter ventilation. Disappearing is the elaborate decking that raised tubs several steps above the floor, making access difficult and even dangerous.

"You'll never get dollar-for-dollar what you put into a renovation," says McCurdy. "But with a kitchen or bath, especially, you'll definitely improve your home's value and increase its resale appeal."

 

By:

Jean Patteson Orlando Sentinel

New 'Good Faith Estimate' will help borrowers save nearly $700

WASHINGTON - For the first time in more than 30 years, the U.S. Department of Housing and Urban Development today issued long-anticipated mortgage reforms that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.

In announcing HUD's final changes to the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA), HUD Secretary Steve Preston said that changes in the housing market and increases in home foreclosures demands action.

"It has been a long road but today we can finally announce a better way to buy homes in America," said Preston. "Consumers need and deserve to know what they're getting themselves into before they sign on the dotted line. After carefully considering the concerns of consumers and the different businesses in the housing sector, we have developed an approach that empowers the average family to shop for the most appropriate loan to meet their needs."

Last March, HUD proposed reforms to the longstanding regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) by improving disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home. Last May, HUD extended the rule's comment period to June 12th to allow for more opportunity for comment on the Department's proposed GFE form.

Brian Montgomery, HUD's Assistant Secretary of Housing, Federal Housing Commissioner, said, "We have carefully considered the concerns expressed from every corner of the mortgage market in developing this rule. I am convinced that we successfully balanced the needs of consumers with those in the business of homeownership. None of us can lose sight of the fact that millions of Americans simply don't understand all the fine print of their mortgages and this, in many respects, is at the heart of today's mortgage crisis."

Since 1974, little has changed about the process Americans endure when they buy and refinance their homes. Now, HUD's final reform will improve disclosure of the key loan terms and closing costs consumers pay when they buy or refinance their home.

HUD received approximately 12,000 comment letters following the proposal of its new RESPA rule. In considering those comments, the Department made considerable modifications to its proposal. For example, HUD originally proposed that settlement agents read a closing script at the closing table and that a copy be provided to borrowers. HUD ultimately discarded the script in favor of a new page on the HUD-1 Settlement Statement that allows consumers to easily compare their final loan terms and closing costs with those listed on their Good Faith Estimate.

Most industry commenter’s said HUD's proposed four-page GFE was too long. HUD shortened the GFE form to three pages including an instructional page to help borrowers understand their loan offer. HUD continues to believe that consumers need to be aware of the key aspects of their loan as well as associated settlement costs.

HUD agreed with many commenters’s who suggested the new GFE allow consumers to compare their estimated closing costs with the actual costs included on their HUD-1 Settlement Statement. To facilitate comparison between the HUD-1 and the GFE, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs in very much the same manner as many of the commenter’s suggested.

HUD will require the new standardized GFE and HUD-1 beginning January 1, 2010.

It can be a difficult decision whether to purchase a resale home or a new home from a builder.

Although new homes typically have a higher sales price than comparable existing homes, buyers are willing to spend more up-front with an understanding that part of what they are paying for is assured low maintenance costs. A builder's warranty, along with brand-new roof, appliances, furnace, and other operating systems that make major repairs unnecessary, work together to counteract possible slower appreciation initially.

Buying New Versus Resale

In today's highly competitive market there is a vast array of choices to be made when deciding on the type of dwelling you wish to reside in. Below is a comparison of the advantages and disadvantages of buying a new home versus a resale home.

Advantages of a New Home

One of the primary advantages of buying a new home is the ability to decorate your home from the beginning exactly the way you want. You can pick all the colors, which range from paint to carpet. You can also make the tile and cabinetry selection for the kitchen and bathrooms.

Often, new homes will have more modern conveniences, better insulation and can be more energy efficient.

Disadvantages of a New Home

Unfortunately, with a new home purchase you should be prepared for the on-going construction you will find around you. Chances are that your grass and lawn will not be in, your driveway will be gravel and your street will turn into a sea of mud whenever it rains or snows. If things are going to go wrong with a newly constructed house, they will appear in the first one to two years.

As the house settles you may find cracks appearing in the walls of the basement, especially near any windows in the basement, make sure you get them fixed right away. Also, you should not finish your basement in a new home for at least a couple of years, just in case cracks and leaks develop.

There are additional expenses associated with new homes that you will not typically find in a resale home. For example, you may have to spend additional money for appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

Closing costs are typically higher for new homes. The purchaser will pay for such additional costs as the New Home Warranty Program, tree planting, utility hook ups and paving of the driveway.

Usually, when you buy a new home, you don't have an opportunity to see the actual layout. All that is provided is a blueprint and in many cases the end product may be a disappointment to the purchaser because of changes that the builder or sub-contractor does not follow or does themselves. Additionally, there is the uncertainty as to who will be your neighbors.

Advantages of a Resale Home

The major advantage of buying a resale home is that you are moving into an established neighborhood. Your lawn is green, your shrubs are growing, your driveway is paved and your trees are well enough established to give your street a feeling of permanence. Often, most extras are already present, such as appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

In terms of investment, a resale home will often give you far more value than a brand new home. Many owners put tens of thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement or any of the items above. Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home.

A $35,000 swimming pool or a $15,000 finished basement or even $5,000 worth of landscaping may make the home very attractive. However these additional costs incurred may not necessarily increase the market value of a home, especially if you have to sell it at a time of year where these major items add little or no perceived value. The buyer gets the home at its real fair market value, which is based on comparable homes for sale or sold in the neighborhood. All those expensive extras may be included in the home with benefit to the buyer at little or no extra cost. This can be a substantial savings over buying a new home.

With a resale, the vendor's asking price is almost always negotiable downwards unlike the builder’s list price which is usually firm. Any extras or changes are added to the list price of a new home and add up quickly.

Disadvantages of a Resale Home

A small percentage of homes in the marketplace are not considered to be in move-in condition. If both live-in partners happen to be working at full time jobs, a move-in condition home is by far the best alternative. If the property is being under "power of sale" or the property has been rented for many years the home may require a lot of work. If the buyer is not handy or does not have the additional up front capital then the purchaser would be better off buying a home in move-in condition or a brand new home. Additionally, as a home gets on in age certain systems such as heating, cooling, roofing, and/or windows need to be upgraded.

Although some perceive the paragraph above as a disadvantage, some consider it as an advantage. A home that needs some fixing up can in fact present some clear cost advantage to a buyer. Usually, it can be purchased below the going market value, while at the same time providing an opportunity to have it decorated to suite your specific tastes.

Neighborhood: Known or Unknown Factor

When you buy a resale home, you can find out a lot more about the property and the neighborhood before you buy than when you buy a new home. Land to support new-home developments usually is located on the outskirts of town. Potential buyers should ask the developer about future access to public transit, entertainment activities, shopping centers, churches, and schools. Local zoning ordinances also should be reviewed. A rather remote area can turn into a fast-food-chain haven within a couple of years. Try to ensure that the neighborhood, if not strictly residential, will not begin sprawling out of control.

Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy. One survey by the National Association of Realtors shows that resale homes do have an edge over new homes when it comes to appreciation.

More Questions and Items to Consider

There is a major decision early in the process of purchasing a new home and that is whether to build a new home or purchase a resale home already on the market. The following provides some considerations that may help you make an informed decision.

Location, location, location.
Are new homes being built in the area you desire? Do you know the surrounding zoning and what will be constructed in the area? How far away are services (schools, stores, hospital, doctors, etc.) that you need? How long is the commute to work?

Investment.
Typically, due to the continual addition of features, rising labor and material costs, new homes cost more than similar resale homes. Do you have to pay significant impact or lot levies or taxes and fees that are imposed on the builder? Are the taxes on the new home much higher than a comparable resale home? Will you be in the new home until the area is built out so you will not be competing with the builders should you need to sell the home? Is the home going to be high priced compared to other homes built or going to be built in the area?

Features.
Are the style and features that you desire only available in a new home? Can you find a resale home with most of the features and amenities you desire? Can you add the features you desire to a resale home? Are newer resale homes available that meet your needs?

Risk.
Is the new home builder or developer financially stable? Is the builder a large well known company with a good reputation? Is the builder asking for significant down payments or advance payments? Are there complaints lodged against the builder for shoddy work or not making repairs? Has the builder been delivering homes when promised? Check with your Better Business Bureau, the town or the city and talk to homeowners that have purchased a home from the builder.

In summary, a resale home can cost less, be more conveniently located, you know the area and amenities and have less risk involved. A new home can be constructed to have the exact style and features you desire, but usually with much higher costs, limited locations, and more risk.

Conclusion

In today's market place both new and resale homes are selling briskly. Once you've evaluated the pros and cons of each alternative, you can make an intelligent, educated decision as to which option is best suited for your particular needs.

Ultimately, the decision should be based on your needs and wants, your family and/or children, your tolerance for risk and the unknown and ultimately your budget.

Once you have invested in a rental property, the responsibility of maintaining and running the property can quickly become overwhelming. For many landlords, the logical solution is to hire a property management company to oversee their rental property. But is this the right decision for you? Here

1. Do you have what it takes to run a rental property? If this is your first foray into property management, you could find yourself in over your head. Collecting rent may sound easy, but in reality, it can be more like a painful extraction. If you are not familiar with rent collection, you can quickly find that your tenants are taking advantage of your inexperience.

In addition to rent collection, day-to-day maintenance of a rental property can be tiring. If you are not operating your property as a full-time job, you may not have the time to address tenant concerns and repairs in a timely manner. This may make hiring a property management company an excellent choice.

2. Where is your rental property located? If you have purchased a rental property near your home or place of business, you'll be able to keep an eye on the property. However, if your rental property is far away, you'll be loath to travel to it to deal with the inevitable problems that arise. If you're unable to check on the property on a regular basis and handle any issues that may arise, finding a local property management company can mitigate these concerns.

3. Does the property need frequent visits, repairs, or attention? If your rental property is a veritable money pit, you can find yourself spending more time there than at your regular job. If you're getting constant requests for repairs to a property, having someone who can devote the majority of their time to your property is very helpful. The more units you have, the more you can benefit from a professional maintenance worker or property management company.

4. What services do you need? If you're looking for a small amount of assistance, such as monthly rent collection, a full-service agency may be too much for your needs. Since you'll need to budget in the fees charged by a property management company, this will cut into your profit margin. Therefore, instead of hiring a full-service company, you may be better served by a part-time property manager or specialist who can handle the most frequent problems.

5. On the other hand, if you do need a complete solution, make sure that the company can provide you with all the services you require. For example, if you need someone who is capable of light maintenance work in addition to rent collection, keep this in mind while you shop for a property management company.

6. Is the company trustworthy and friendly? Before hiring a property management company, do thorough research to ensure that it is reputable. If you are an absentee landlord, this is extremely important. You will be relying on this company to collect rent and represent you and you interests. Check references and talk to other landlords who have worked with this company. Make sure the representative of the property management company is level-headed and diplomatic. Just one bad interaction between tenant and rent collector can destroy goodwill that can take years to restore.

Hiring a property management company should result in more free time and less worry for you. If you hire a property management company and find that you are still constantly worrying about your property, you may need to restructure your schedule to spend more time at the property, or have more frequent communication with the property management company.