I just don’t know if they can. Rates as low as 4% for a 30 year fixed loan are virtually unprecedented in our life time. If you are waiting for rates to go lower I just don’t think they are going to. I reveiwed the history of the ten year bond recently and over the last 60 years there has been only one other time the yeilds have been this low and that was during the economic freefall we experienced in 2008. If you look at the average values of real estate in 2006 coupled with the 2 percent higher interest rates and look at the demand then, one can only assume we are at the bottom looking up. Call me with questions or concerns. Happy to help all of Sonoma County home owners. “Hunt for your loan”.

When Sonoma County Sellers consider various ways to sell their house, one thing that should be considered is the carrying back of paper in order to make the deal work. It may sound funny for a Mortgage lender to talk about seller carry backs but it is a really useful tool.

I am not talking about the whole first but say you had a 300,000 dollar house to sell. The buyer can scrape together 35,000. The buyer is looking at a 90% first which carries with it PMI and a higher interest rate that maybe they can’t qualify for. Yes they could look at FHA finaincing but the problem still exists…high debt to income ratios.

The soloution would be for the seller to carry a 10% second, interst only, at a prevailing interest rate for 5 years. It solves the probelm of the high mortgage payment and the Private Mortage insurance. Think about it. It just might save your deal!

Mortgage rates have hit a 50 year low but there just aren’t many borrowers that can qualify. It appears that while rates are low, that folks have lost their impetus to buy real estate. May be everyone is on vacation. But in the mean time there are some fabulous deal out there.

Crreative finanincing is a buzz word of the past but there are certain things that future buyers can do to help themselves. First and foremost is to get preapproved. At least sit down with a mortgage lender and figure out what you can qualify for. It is getting more and more common for listing agents to put in their remarks that they won’t consider showing the proerty to a buyeer that isn’t preapproved. That may be a bit harsh but it does put the problem into perspective. There are just too many variables to leave it up to chance. GET PRE APPROVED!

I know, I know…you have heard it before but really…This time they really are the lowest that they have ever been. I can’t think of a better time to buy or refinance. I am so sure they are at the bottom I even locked my own loan yesterday. 30 year conforming fixed rates are in the middle 4’s depending on a whole variety of factors. I locked A high balance interest only at 4.375% fixed for 10 years yesterday. If you wanted to go 7 years you could be in the high 3’s, interest only. Think what that could do to your monthly payment. Yes you have to qualify and your house has to appraise but we are figuring it out and we are doing loans. Call or email me

Spring has Sprung and shortly, there is going to be a buying demand of Sonoma County Real Estate like there is every spring. But two coinciudental things happened yesterday and today that are going to effect that.
It was reported in Money Matters that Santa Rosa Real Estate had the highest appreciation in the country over the last month…6%. Buying demand has already started. Also, interest rates rose about a .25% becuase the Gov’t is trying to sell more t’bills and people aren’t buying so they are having to make them more attractive by raising the note rates. Interest rates are rising. Do you find that coincdental? Do you also find it coincdental that gas prices go up in the spring right before the big driving season. NO I didn’t think you did. The Gov’t has also stated it isn’t going to buy any more Mortgage backed securities after March. That too will put pressure on rates. And then there is the tax credit for home purchasers, first time and old hands, that expires at the end of April. Believe me when i tell you, that now is as good a time as you may have for the next 30 years to buy that home. Think about it…5%, 30 year fixed finaincing plus 8000 dollars back to you after you close and more inventory to select from than there will ever be. Now is the time ladies and Gentlemen. You need to get preapproved for a loan BEFORE you shop for that home so go to my website and fillout the online loan application and we will have you running in mere moments. Next month will be more difficult…I assure you. Also if you want free access to the MLS drop me a line and i can set you up for FREE.

Revisions include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.

By Kenneth R. Harney
December 6, 2009
Reporting from Washington

If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.
Tops on the agency’s list of advice: Cool it for a couple of weeks. Even if you qualify for one of the credits, don’t send in any requests to the IRS quite yet. Wait until later this month when the agency publishes its revised Form 5405 with the key instructions needed to get you a check from the government.

The forthcoming version of the form will incorporate the major changes to the tax credit program made by Congress in legislation signed by President Obama on Nov. 6. These include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.

In a tax bulletin issued just before Thanksgiving, the IRS emphasized that all home purchasers after Nov. 6 “must use this new version [of Form 5405] to claim the credit.” Put another way: If you send in the old version — the one you can currently download from the agency’s website, www.irs.gov — your request for the credit will probably go nowhere.

The legislation — known as the Worker, Homeownership and Business Assistance Act of 2009 — extended the $8,000 first-time home purchaser credit until April 30 for signed contracts and June 30 for closings. The law also created a new tax credit for people who have owned a principal residence for a consecutive five of the previous eight years, and who purchase a replacement principal residence with a signed contract no later than April 30, followed by a closing no later than June 30.

Qualified repeat buyers can obtain credits up to $6,500. For both the first-time and repeat buyer program, the credit is equal to 10% of the purchase price of the house, up to a maximum of either $6,500 or $8,000.

The new IRS bulletin also outlined the agency’s guidance on other important features of the amended credit program:

* Members of the armed forces, as well as diplomatic and intelligence personnel serving in foreign countries, will get an extra year to buy a principal residence and still qualify for a credit. They will have until April 30, 2011, to enter into a contract to purchase a house, and until June 30, 2011, to close on it.

* Anyone who buys a house after Nov. 6 — even those who had intended to get in the door before the previous Nov. 30 expiration date for the $8,000 credit — will now need to comply with several new rules. First, the house cannot cost more than $800,000. Second, no one under age 18 can claim the credit no matter what the circumstances. And finally, anyone who is counted as a dependent on another taxpayer’s federal filings is ineligible for a home purchase tax credit.

* The expanded income limits for purchasers after Nov. 6 range to $125,000 in “modified adjusted gross income” for single taxpayers and to $225,000 for those who file jointly. Singles with incomes between $125,000 and $145,000 may be eligible for reduced credit amounts, as are joint filers with incomes from $225,000 to $245,000. Anyone with an income above these amounts cannot qualify for either of the credits. Under the pre-Nov. 6 rules, taxpayers applying for the $8,000 credit were limited to incomes of $75,000 (single filer) to $150,000 (joint filer).

The IRS continues to offer detailed consumer information resources on the credits, including questions and answers on a variety of home purchase scenarios.

For example, some taxpayers seeking the extended $8,000 credit are uncertain about co-purchase and co-signing situations, especially involving parents and adult children. When a home-owning parent co-signs for a mortgage with a son or daughter, and both names appear on the note, can the son or daughter qualify for the first-time purchaser credit?

The IRS says the parent clearly does not qualify for any portion of the credit since he or she already owns a principal residence. But if the son or daughter has not owned a house during the three years preceding the current purchase, and qualifies on income, he or she can be allocated the entire $8,000 credit.

Similarly, when unmarried individuals co-purchase a house, and only one of them is eligible for the credit, the full $8,000 can be allocated to the eligible buyer.

Distributed by the Washington Post Writers Group.

Home sales far exceeded expectations last month, surging to the highest level in 2 1/2 years as first-time buyers rushed to take advantage of an expiring tax credit.

The National Association of Realtors said Monday that home resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September.

The tax credit of up to $8,000 for first-time owners was originally set to run out on Nov. 30, but Congress renewed it earlier this month and broadened its reach. People who have owned their current homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase. To qualify, buyers must sign a purchase agreement by April 30.

The Realtors report on October home sales reflect offers made before buyers knew the tax credit would be extended. “There was a lot of rush and hurry to complete sales” before the deadline, said Lawrence Yun, the trade group’s chief economist.

But sales are likely to drop over the winter as buyers hibernate for a few months without the looming tax credit deadline.

The new deadline means that “we’re going to see some good activity coming out of the spring,” said Pat Lashinsky, chief executive of online real estate brokerage ZipRealty Inc.

Sales, which were nearly 24 percent above last year’s level, had been expected to rise to an annual pace of 5.65 million, according to economists surveyed by Thomson Reuters.

The median sales price was $173,100, down 7.1 percent from a year earlier and off 1.6 percent from September.

In addition to lower prices, mortgage rates have been hovering around 5 percent since the spring, largely because of government intervention. That has helped restore housing affordability in large swaths of the country.

The inventory of unsold homes on the market fell about 4 percent to 3.6 million. That’s a 7 month supply at the current sales pace, and close to a healthy stock of about six months.

Nationwide sales are up nearly 37 percent from their bottom in January, but are still off about 16 percent from the peak in autumn 2005.

Over the summer, the housing market started to rebound from the worst downturn in decades, aided by aggressive federal intervention to lower mortgage rates and bring more buyers into the market.

But experts forecast that prices will fall again. Most say they will hit a new low next spring, perhaps falling another 5 to 10 percent, as more foreclosures get pushed onto the market.

A record-high 14 percent of homeowners with a mortgage were either behind on payments or in foreclosure at the end of September, the Mortgage Bankers Association said last week. The worst damage is still concentrated in the states hardest hit from the start: Florida, Nevada, California and Arizona. Together, they accounted for 43 percent of new foreclosures.

WASHINGTON – Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.

Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.

Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.

Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.

Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.

Majority Democrats have refused to add the amendments.

If the Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for homebuyers.

Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate.

Lawmakers didn”t release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion.

Industry representatives said uncertainty about the tax credit is hurting new home sales. September’’s decline was the first since March.

It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors.

“Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said.

About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

The tax credit for money-losing businesses is a favorite among Republican lawmakers. Businesses could get tax refunds by using losses from 2008 and 2009 to offset taxable profits made in the previous five years. Under current law, they can only offset profits from the previous two years.

The provision would help a variety of industries, including retailers, manufacturers and home builders, though it’’s expensive.

“It’’s clearly a way to put cash in the hands of some major economic players,” said Clint Stretch, a tax policy expert at Deloitte Tax.

A similar proposal that was ultimately dropped from the economic stimulus package enacted in February would have cost nearly $20 billion over 10 years. Lawmakers are working to reduce the price tag.

Because people are so strapped for cash, this is a good way to get refunds when businesses need them for operating expenses, said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation.

Are you ready…not for football but are you ready, really ready to buy a property?  Are you pre-approved or are you fully approved?  Did you even know you can get fully approved except for the property part?  Most lenders really don’t want to spend the time but if your serious then you should get fully approved.  That way when you do find the property you are ready to buy you can make an offer that .

You need to find a lender you can talk to for starters.  Someone that is willing to take the time to explain all the nuances to you.  Or if you are an old hand at mortgages,  to at least give you all the options that your scenario requires.  Then you need to fill out a loan application.  This can be done online but once the lender receives it, they should give you a call to fill in any blanks that may have been missed.  then you will need to provide 2 years worth of income verification.  This could be all pages of your Tax returns and your w-2’s plus you will need to provide a couple of pay stubs showing your current employment.  You will also be asked to document the funds you plan to use at close.  Usually 2 months worth of bank statements will suffice.  there are also lots of forms that need to be explained.

Bottom line is there is a lot of work these days, the lenders requires  in order to fully approve you but that once you jump over all the fences you will be so much farther ahead than most other borrowers.

Please call me or go to my other website at www.wconrad.myprospectmortgage.com

I having been doing this for 20 years an look forward to helping you with your financing needs whether you are a first time home buyer or a seasoned veteran.