Two More Great Reasons to Buy Properties in Laguna Beach and Orange County-Free Money and Protection!
Two programs have been unveiled to encourage potential buyers to become buyers and discover the joys of a new home purchase in Laguna Beach, or any area in Orange County. There is a fantastic inventory of homes on the market, some are distressed properties and others are just well-priced “regular” sales.
First, read about the Government’s extension of the Home Buyer Tax Credit with an added benefit for existing homeowners.
Then, read on about the Buyer Protection Program offered through Bank of America.
This information is coming to you compliments of Kevin Budde at Bank of America. If you are wondering how much home you can safely afford, be sure to contact Kevin, or your lender and get the right information to make your decision. If you call Kevin, let him know that the team of Hillary Caston at The Coastal Property Experts referred you. Now, we don’t get anything out of the deal…we just know that Kevin does a great job and we want to hook you up with a top notch professional in the industry.
Home Purchase Tax Credit Revisited
With the extension of the first time homebuyer tax credit and the addition of a tax credit for existing homeowners there have been changes that need to be noted. Please find compiled the most important facts associated with the new laws. You will find below a break down of both the $8,000 first time homebuyer tax credit and the $6,500 existing homebuyer tax credit.
$8,000 First Time Homebuyer Tax Credit
The income limits have changed. In order to receive the full tax credit amount, the income limit for a single person is $125,000 and a married couple is $225,000. They can earn more than that but the amount received will be phased out to a maximum income of $145,000 for a single person and $245,000 for a married couple. In addition, no tax credit is available if the cost of the home exceeds $800,000. The buyer may not acquire the property from any relative on either side of the family.
The same restriction applies as before which is they cannot have owned a home in the last three years and they must continue to live in the new house for 3 years or it will be required to pay the credit back. The buyer must enter into a binding contract to purchase by April 30, 2010 and close no later than July 1, 2010. In order to receive the tax credit the buyer must file his or her federal tax return with the Internal Revenue Service along with the HUD-1 and IRS Form 5405. As an example, if the first time buyer owes the government $5,000 in tax, they will receive a $3,000 check from the Internal Revenue Service, not the entire $8,000.
$6,500 Existing Homebuyer Credit
To qualify the buyer must have owned and lived in a home for at least five of the last eight years. The existing home may have already sold and not been replaced in the last year or two. The home purchased must be the primary residence and the existing home may become a rental property or second home. The new purchase does not have to cost more than the existing one.
If the existing home is sold, taxable profits from the sale will be added to the buyer’s other earnings to determine if the adjusted gross income exceeds the allowable thresholds. Remember, some profits from the sale of the existing home do not count as income. Taxpayers are allowed to exclude $250,000 per person or $500,000 per couple if they lived in the home two of the last five years. The $6,500 tax credit also phases out for singles earning more than $125,000 and couples earning more than $225,000. Always consult a professional tax advisor for tax advice.
Borrower Protection Plan
The Borrower Protection Plan (BPP) is a unique mortgage feature available only at Bank of America. The BBP will cancel 6 principal and interest mortgage payments if the protected borrower suffers a qualifying Disability, Involuntary Unemployment, Hospitalization or a Loss of Life.
There is No Cost for the first 12 months to protect one borrower. BPP is available on owner occupied purchase transactions and loan amounts below $500,000. It is very easy to enroll and there are no medical exams required and no age limit. When the debt is cancelled there is no requirement to repay later.
Even though there is no cost to a single borrower for the first 12 months, joint protection can be offered at a deeply discounted rate of 3% of the principal and interest payment for the first 12 months. The price after the first year is 7.5% of the principal payment for a single borrower and 10.5% of the principal payment for joint borrowers.
The Borrower Protection Plan is applied for when the borrower applies for their new home loan at Bank of America. Again, there is no cost to one borrower for the first year and the protection begins after 90 days of the note date.
Now is a great time to buy a home but potential borrowers are concerned about the economy and their job. The Borrower Protection Plan from Bank of America offers borrowers security by knowing they are protected giving them the confidence to purchase the home they want.
To find out more please contact a member of the Kevin Budde Team
