Something To Be Thankful For

Volume 3 Issue 12 December 2009

I t has been a rough year for many around the world. The economic c r i s i s wh i c h

started three years ago as a downturn in an overheated U.S. real estate market has spread world-wide. Many would ask what they have to give thanks for in a year in which so many have lost their jobs and houses. We believe there is a lot to give thanks for. For one, after declaring that the economy could withstand the downturn, the government soon came to realize that we must apply strong medicine. Starting in 2008, we

did apply this medicine in a variety of ways from record low interest rates to making sure that the banking system did not collapse. We have not addressed the long-term issue of deficit spending, but most would agree strong measures were warranted.

In every chal lenge there l ies opportunities. For example, the down market has made real estate a bargain and millions are becoming owners for the first time. The recent extension and

In This Issue P2 Home Market Rebounds || P2 Are You Paying Too Much in Property Taxes?

P3 Fed Rate Moves || P4 Tax Credit Is Expanded!

Did You Know…

James N. Barnes SWBC Mortgage

(512) 553-6496 Cell

(512) 531-1800 Office

Buyers of new homes can expect

much healthier and more energy-

efficient properties. Tom Molidor,

president of Molidor Custom

Builders in Illinois, recommends

installing a high-efficiency furnace

close to the family-use area, instead

of the basement. A 3,000-sq-ft. home

that is top-rated for energy efficiency

can be heated in the greater Chicago

area for less than $50 a month,

estimates R.A. Faganel Builders.

Other common energy-friendly

features include double- or triple-

paned windows that keep out cold air

and make homes quieter…

Source: Chicago Tribune

Selected Interest Rates

November 19, 2009

30 Year Mortgages 4.83%

2009 High (June 11) 5.59%

2009 Low (April 30) 4.78%

15 Year Mortgages 4.32%

5/1 Hybrid ARMs 4.25%

1 Year Adjustables 4.35%

10 Year Treasuries 3.34%

Sources:

Fed Reserve, Freddie Mac

Note:

Average rates do not include fees and

points. Information is provided for

indicating trends only and should not

be used for comparison purposes.

Specializing inSpecializing in

�� ResidentialResidential

Purchases Purchases

�� ResidentialResidential

Refinances Refinances

�� Home EquityHome Equity

Loans Loans

Continued on Page 3

Are You Paying Too Much In Property Taxes?

Y ou know that your home's value has gone down. So why doesn't your property

tax fall as well? Home prices fell 27% from the 2006 peak to the end of 2008, according to the S&P/Case-Shiller Index, while the amount municipalities collected in property taxes rose 12% from 2006 to 2008. Keep in mind that this drop is an average. Some areas experienced much smaller decreases. There's a simple fix: Dispute your home's assessment. Simple, but not always easy. Municipalities are flooded wi th homeowners seeking tax reductions, and many towns are reluctant to deliver "because they can't find money anywhere else," says Leslie Sellers, president-elect of the Appraisal Institute. That means your argument has to be airtight. Follow these steps to help the assessor see it your way. Learn the rules.

Each municipality's assessor reevaluates properties periodically, usually every one to three years. Those who do so every five to 10 years often adjust assessments annually based on market factors. You can appeal your assessment in any year, as long as you do so within

a certain amount of time after you get your tax bill — typically within 30 to

90 days. Don't get a bill because you pay through mortgage escrow? Call town hall and ask for a copy. In a few areas, your assessment must be off b y a m i n i m u m percentage for you to make an appeal. For

example, in New Jersey, it's 15%. Call your assessor to see if such a limit applies. Obtain the facts and develop rapport

with the Assessor.

First, check the accuracy of your official property record,. This should be available online or in the assessor's office. Factual errors aren't uncommon. Prove that, say your house has three bedrooms rather than four, and your tax can get lowered immediately. Also gather info on comparable homes using real estate sites like Zillow.com or with the help of a Realtor. Look for homes like yours within a mile of your address that sold within two months of the municipality's assessment date for less than your home's assessed value. Forget about foreclosure sales as most towns won't consider them. If your home is older or smaller than the "comps" you

Home Market Home Market

ReboundsRebounds

M o s t s t a t e s o s t s t a t e s

continued to continued to

e x p e r i e n c e e x p e r i e n c e

rising exist-rising exist-

inging--home sales in the third home sales in the third

quarte r , w i th p r ices quarte r , w i th p r ices

moderating in many metro moderating in many metro

areas, according to the areas, according to the

latest survey by the National latest survey by the National

Association of Realtors®. Association of Realtors®.

Total state existingTotal state existing--home home

sales, including singlesales, including single--

family and condo, increased family and condo, increased

11.4 percent to a seasonally 11.4 percent to a seasonally

adjusted annual rate of 5.30 adjusted annual rate of 5.30

million units in the third million units in the third

quarter from 4.76 million quarter from 4.76 million

units in the second quarter, units in the second quarter,

and are now 5.9 percent and are now 5.9 percent

above the 5.01 millionabove the 5.01 million--unit unit

pace in the third quarter of pace in the third quarter of

2008. Sales increased from 2008. Sales increased from

the second quarter in 45 the second quarter in 45

states and the District of states and the District of

Columbia; 28 states and D.C. Columbia; 28 states and D.C.

saw doublesaw double--digit gains. digit gains.

YearYear--overover--year sales were year sales were

higher in 32 states and D.C. higher in 32 states and D.C.

Lawrence Yun, NAR chief Lawrence Yun, NAR chief

economist, said the tax economist, said the tax

credit is a significant factor. credit is a significant factor.

“We can’t underestimate just “We can’t underestimate just

how powerful a catalyst the how powerful a catalyst the

firstfirst--time home buyer tax time home buyer tax

credit has been for the credit has been for the

housing sector,” he said. housing sector,” he said.

“It’s given buyers the “It’s given buyers the

confidence they needed to confidence they needed to

get off the fence and take get off the fence and take

advantage of extremely advantage of extremely

a f f o r d a b l e h o u s i n g a f f o r d a b l e h o u s i n g

conditions. The buying conditions. The buying

conditions this year are the conditions this year are the

most favorable on record most favorable on record

dating back to 1970, but the dating back to 1970, but the

tax credit is allowing buyers tax credit is allowing buyers

to set aside any reservations to set aside any reservations

about waiting for a better about waiting for a better

deal...”deal...”� � � � Source: NAR

Page Two

Savings For Years In

The Future

Page Three

found, adjust the price down; if you recently renovated, adjust up. Collect five solid comps — more is overkill. Next, informally discuss your findings with the assessor. He or she is probably inundated by angry homeowners, so stand out by being pleasant. "If you establish a rapport, it will be harder for him to tell you no," says Melinda Blackwell, a property tax attorney in Dallas. Can't get a meeting, or the meeting goes nowhere? Time for a formal appeal. Test-drive a hearing

While some municipalities allow online appeals, most require in-person hearings, usually at the county level. File your appeal as quickly as possible so that you'll be at the front of an increasingly long line. (In Clark County, Nev., for example, 6,019 homeowners appealed their property taxes this year, more than triple the number in 2006. Can't get a date until after taxes are due? Pay up; you'll get a refund if you win. While you're waiting, sit in on a hearing to see the format. When your turn comes, you don't need anyone to represent you. Just give board members a packet with copies of your tax statement, data on your five comps and any additional evidence. For example, if you're arguing that your house's assessment should be lower than that of your neighbor's because yours has a leaky roof, include photos of both roofs and repair cost estimates.

If you lose and the annual amount you're being overcharged is at least a few thousand dollars, it may be worth it to make an appeal at the state level. In roughly half of states, you must do so through a state review board; in the rest, you file a complaint in state tax court. You'll need a property tax attorney or a property tax consultant if you're appearing before a board. To avoid hourly fees of $150 to $400, ask if your pro will take your case on contingency. Most demand half of your first year's tax savings. But remember: If you win, those savings should accrue for years to come. It is obvious that appealing your property taxes is serious business. However, the ordeal can be well worth the hassle...������������

Source: CNN/Money Source: CNN/Money Source: CNN/Money

Are You Paying Too Much In Property Taxes?

Continued from Page 2 Something Something

To Be To Be

Thankful For Thankful For Continued from Page 1Continued from Page 1

expansion of the tax credit shows the government will government will

continue to apply strong continue to apply strong

medicine. Low rates, low medicine. Low rates, low

prices and a government prices and a government

subsidy point to a bargain subsidy point to a bargain

that many have not seen for that many have not seen for

many years. Even the recent many years. Even the recent

lull in housing starts bodes lull in housing starts bodes

well for the longwell for the long--term term

prospects of real estate prospects of real estate

because analysts agree that because analysts agree that

the market will not rebound the market will not rebound

permanently until the excess permanently until the excess

inventory is off the shelves. inventory is off the shelves.

As the bad news has As the bad news has

brought opportunities, the brought opportunities, the

good news of a rebounding good news of a rebounding

real estate market can also real estate market can also

create problems. For one, create problems. For one,

don't expect record low don't expect record low

rates to be with us forever. rates to be with us forever.

The Federal Reserve Board The Federal Reserve Board

has kept shorthas kept short--term rates term rates

close to zero and also has close to zero and also has

brought longbrought long--term rates term rates

down by purchasing down by purchasing

mortgage securities. As the mortgage securities. As the

market rebounds, less help market rebounds, less help

will be needed and when the will be needed and when the

government backs off, the government backs off, the

record sale on real estate we record sale on real estate we

have witnessed may be have witnessed may be

over...over...����

“Obtain the “Obtain the

facts and facts and

develop rapport develop rapport

with the with the

Assessor”Assessor”

Tax Credit Is Expanded!

G reat news for homebuyers courtesy of the government. The President

has signed legislation that extends the $8,000 homebuyer tax credit to

contracts signed by April 30 and closed by June 30 of next year. The

credit, which many say has boosted home sales in recent months, was

set to expire after Nov. 30 of this year. The bill also creates a $6,500 credit for those

who buy a home after living in their current house at least five years. That measure

would also apply to contracts signed by April 30 and closed by June 30. The current

credit defines a first-time homebuyer as someone who has not owned a residence

within the past three years.

Both credits are available only for the purchase of principal residences priced at

$800,000 or less. The bill also raises the adjusted gross income cap to $125,000 for

single filers and $225,000 for joint filers. The amount of the previous credit began to

phase out for taxpayers whose adjusted gross income was more than $75,000, or

$150,000 for joint filers.

"It's going to put people back to work, both home builders and people in the real

estate business," said Sen. Chris Dodd, D-Conn. "The kind of jobs that can make a

difference." The extension will cost $10.8 billion over 10 years, according to the

Joint Committee on Taxation...���� Source: CNN/Money

My goal is to My goal is to

provide expert provide expert

advice and advice and

direction for my direction for my

clients with an clients with an

overall goal of overall goal of

providing a real providing a real

estate finance estate finance

transaction that transaction that

exceeds their exceeds their

goals and goals and

expectations. expectations.

—— John Doe John Doe

Senior Loan Senior Loan

OfficerOfficer

Frequently Asked Questions About the Move-Up or Repeat Home Buyer Tax Credit

1.Who is eligible to claim the $6,500 tax credit? Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit 2.What is the definition of a move-up or repeat home buyer? The law defines a tax credit qualified move-up home buyer(long-time resident) as a person who has owned and resided in the same home for at least five consecu-tive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership his-tory of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit 3.How is the amount of the tax credit determined? The tax credit is equal to 10 percent of the homes purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit

4.Are there any income limits for claiming the tax credit? Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buy-ers with a modified adjusted gross income (MAGI) above those limits. The phase-out range for the tax credit pro-gram is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

5.How do I claim the tax credit? Do I need to complete a form or application? Are there documentation re-

quirements? You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns

For More Information go to www.federalhousingtaxcredit.com