Blog for Charleston SC residential real estate, interest rates and market updates, real estate listings and homes for sale, mortgage loan rates, home buying, home selling information – www.NewtonSellsCharleston.com, Barbara Newton, REALTOR/Shareholder, The AgentOwned Realty Co., Charleston Group

Doing the Charleston!

You MAY want to consider locking your mortgage rate BEFORE tomorrow's Federal Reserve announcement

September 22nd, 2009 8:38 PM

The Federal Open Market Committee started a 2-day meeting in Washington today. The scheduled get-together ends at 2:15 PM ET Wednesday after which the FOMC will issue a press release to the markets.

The FOMC meets 8 times annually and its adjournments are among the biggest market-movers of the year. The Fed's post-meeting press release is a direct look into the mind of the Federal Reserve and Wall Street is looking for clues anywhere it can find them.

After its August 2009 meeting, the FOMC said in its press release that financial markets have improved, household spending is stabilizing but remains constrained, and although economic activity is likely to remain weak for a time, it is leveling off.

Since then, however, credit risks have lessened on Wall Street, consumer spending has shown signs of life and Fed Chairman Ben Bernanke said the recession is "very likely over".

This is why tomorrow's FOMC press release is so important. Markets don't expect the Fed to raise or lower the Fed Funds Rate, but they do expect the Fed to shed light on its next series of moves.

If the Fed alludes to inflation and stronger growth ahead, mortgage rates should rise. By contrast, reference to slower growth ahead should help keep rates steady. The FOMC is expected to leave the Fed Funds Rate within its target range of 0 to 1/4 % - the lowest its been in history (see graph below).

But, more often than not, it is what the Fed SAYS that will matter more than what it does. If you have a mortgage rate that is floating and are wondering if the time is right to lock, the safe thing to do is lock prior to Wednesday at 2:15 PM.

Comments above contain information that is courtesy of Melissa Breeland of Residential Mortgage of SC

Posted by Barbara Newton on September 22nd, 2009 8:38 PM

$8000 First Time Homebuyer Tax Credit Info

September 17th, 2009 6:57 PM

How the $8000 First Time Homebuyer Tax Credit Works

Sources: National Association of Home Builders and the Internal Revenue Service

Are you considering a leap to homeownership? With the help of the $8000 tax credit

program you could own your own home before the end of this year!

It may interest you to know that if you have not owned a house in the last 3 years –

YOU ARE CONSIDERED A FIRST TIME HOMEBUYER UNDER THIS PROGRAM!!!

Q: Who is eligible? To qualify as a “first-time home buyer” the purchaser, or his/her

spouse, may not have owned a residence during the three years prior to the

purchase.

The home must be purchased on or after Jan. 1 and before Dec. 1, 2009.

For the purposes of the tax credit, the purchase date is when closing occurs and the

title to the property transfers.

Q: How is the amount of the tax credit determined?

A: The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.

Q: Are there income limits?

A: Yes. The limit for single taxpayers is $75,000; $150,000 for married taxpayers filing a joint

return. You cannot have a modified adjusted gross income above $95,000 (single) or $170,000

(married), and the credit is reduced proportionally for taxpayers whose modified adjusted gross

income is between these amounts.

Q: What is "modified adjusted gross income"?

A: Modified adjusted gross income is defined by the IRS. To find it, 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. AGI includes all income including wages, salaries, interest income,

dividends and capital gains.

Q: How is this homebuyer tax credit different from the tax credit that Congress enacted in

July of 2008?

A: The most significant difference is that this one does not have to be repaid.

Q: How do I claim the tax credit?

A: Claim it on your federal income tax return by completing IRS Form 5405, then claim this amount

on line 67 of your 1040 for 2009 returns (line 69 of the 1040 income tax form for 2008 returns).

Q: Is a tax deduction the same as a tax credit?

A: No. A tax deduction is subtracted from the amount of income that is taxed. A tax credit is a

dollar-for-dollar reduction in what you owe for income taxes. That means if you owe $8,000 in

income taxes and receive an $8,000 tax credit, you'd owe nothing to the IRS. If you qualify for

the first time homebuyer tax credit, and you do not owe any income taxes, $8000 will be

refunded to you if you purchase a home costing $80,000 or more, before December 31,

2009.

Posted by Barbara Newton on September 17th, 2009 6:57 PM