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Buying a Home with Federal Tax Credits–Quick Facts

by Pistol Tingen

Who is Eligible

• First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $8,000. 

• Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $6,500.

• All U.S. citizens who file taxes are eligible to participate in the program.
Income Limits

• Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000. 

• For married couples filing a joint return, the combined income limit is $225,000.

• Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit. 

• The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

• The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. 

 Types of Homes that Qualify

• All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.  
 

Tax Credit is Refundable

• A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

• For example:   
> A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 tax credit).  
> A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 tax credit).

• All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

• The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

Homes Available in the Pitt County and Greenville, NC Area

For more information regarding The Federal Housing Tax Credit or homes available in the Pitt County or Greenville, NC area, please call The Pistol Tingen Team at (252) 321-6161.

Information provided by The National Association of Home Builders.

More Foreclosures on the Horizon

by Madeleine Tingen

It's more than mere speculation--there is yet another wave of foreclosures looming. According to both the U.S. Treasury Department and Fitch Ratings, the housing market faces the prospect of a new round of foreclosures. 

Last week, Fitch Ratings released a report indicating that as hundreds of thousands of risky home loans known as option adjustable-rate mortgages scheduled to reset to significantly higher payments, more borrowers may be forced to fall behind. Fitch Ratings Credit Market Research provides market participants with data and analysis on default and recovery rates and broad credit trends in the fixed income markets. The Fitch Report covers only those mortgages that were securitized, meaning packaged into securities and resold.

Approximately 70 percent of the $189 billion in outstanding option ARMs will reset by 2011--according to the Fitch report, which would be another setback to the wavering housing market still attempting to recover from the mortgage meltdown that precipitated the financial crisis.

The unraveling of the option ARMs could be felt for years--even though they make up only 1.3 percent of the outstanding mortgages and were used by a far smaller segment of the population than subprime mortgages. Fortunately the fallout from the resets should not be as devastating as the initial market setback.

Additionally, Fitch estimates that $134 billion in option ARMs will reset in the next two years. It expects monthly payments to jump 63 percent on average, or $1,053 a month, for loans adjusting this year and next--prompting a rise in defaults and foreclosures.

Clearly, foreclosures and distressed properties will continue to plague the housing market over the next few years.

If you are interested in more information regarding foreclosures--specifically those within the Greenville, NC and Pitt County area, please contact The Pistol Tingen Team at (252) 321-6161.

 

Act Fast to Receive $8,000 First-Time Home Buyer Tax Credit

by Madeleine Tingen

Time is quickly running out for first-time home buyers to receive a tax credit of up to $8,000.  There is tremendous urgency for first-time home buyers to choose a home, put it under contract and actually close or finalize the sale immediately.

 

Even though the tax credit doesn't expire until November 30, today's home purchases take approximately 45 to 60 days to close as the underwriting and appraisal process is taking longer because lenders are being more cautious.  For the serious first-time buyer that means their offer really needs to be made this month or at the very latest early in October.

 

Real estate groups are urging Congress to extend the credit beyond its current deadline and expand the tax credit to up to $15,000. 

 

Legislation exists in both the Senate and the House that would expand the tax credit.  A proposal by Sen. Johnny Isakson, R-Ga., would raise the credit amount to a maximum of $15,000 for any buyer of any home over the next year.  It would remove the caps that currently apply (those limits are now $75,000 for an individual and $150,000 on couples).

 

"I think we've got a realistic chance of doing this," Isakson says.  "Our problem is not with the first-time home buyer, it's with the move-up buyer."

 

Lawrence Yun, chief economist at the National Association of Realtors, says extending or raising the tax credit would spur the housing recovery, which in turn would help bolster the economy.

 

Under the existing legislation, as the deadline looms, Realtors say they are seeing a market upswing in interest by first-time home buyers. 

 

For more information regarding the $8,000 first-time buyer tax credit or assistance purchasing a home within the Greenville, NC or Pitt County area, please call The Pistol Tingen Team at (252) 321-6161.

Existing-Home Sales on the Rise

by Madeleine Tingen

The National Association of Realtors announced uplifting reports for existing-home sales.  August 21, 2009, NAR released statistics revealing that for the first time in five years, existing-home sales have increased for four months in a row.

The last time sales rose for four consecutive months was June 2004, and the last time sales were higher than a year earlier was November 2005.  The National Association of Realtors includes the following in their category of existing-homes:  single-family, townhomes, condominiums and co-ops.  In total, sales rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.

Chief economist for the NAR, Lawrence Yun, stated that he is encouraged.  "The housing market has decisively turned for the better.  A combination of first-time home buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to the higher sales," he said.  Furthermore, Yun explained, "Because price-to-income ratios have fallen below historical trends, there are more all-cash offers.  In some recovering markets like San Diego, Las Vegas, Phoenix and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint."

The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008.  Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

If you would like specific information on the existing-home sales statistics in the Greenville, NC and Pitt County area, please contact The Pistol Tingen Real Estate Team at (252) 321-6161.

$8,000 First-Time Home Buyer Tax Credit Availability Ends Soon

by Madeleine Tingen

Yes, you can still take advantage of the First-Time Home Buyer Tax Credit—but time is quickly running out.  Many first-time homeowners have already benefitted from this helpful program.

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here are some of the essential facts regarding the 2009 tax credit program that can help turn prospective first-time home buyers into first-time home owners.

Who qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser of his/her spouse may not have owned a residence during the three years prior to the purchase.

Which properties are eligible?


The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos and townhomes.

How much will the credit be?

The maximum allowable credit for home buyers is $8,000.  Each home buyer’s tax credit is determined by two factors:

1) The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

2) The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the buyer(s) income exceeds these limits, can he/she still get a credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the tax credit need to be repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

If you would like more information about the $8,000 First-Time Home Buyer Tax Credit or any real estate matters, please contact The Pistol Tingen Real Estate Team at (252) 321-6161.

 

 

Help for America’s Homeowners - You May Be Eligible

by Pistol Tingen

On April 28, the Obama Administration announced details of new efforts to help bring relief to responsible homeowners under the Making Home Affordable Program, including an effort to achieve greater affordability for homeowners by lowering payments on their second mortgages as well as a set of measures to help underwater borrowers stay in their homes.

Continuing to bolster its outreach around the program, the Administration also announced last week a new effort to engage directly with homeowners via MakingHomeAffordable.gov. Starting April 28, homeowners will have the ability to submit individual questions through the website to the Administration’s housing team. Members of the Treasury and HUD staffs will periodically select commonly asked questions and post responses on MakingHomeAffordable.gov. To submit a question, homeowners can visit www.MakingHomeAffordable.gov/feedback.html.  Selected questions from homeowners across the country and responses from the Administration will be available at www.MakingHomeAffordable.gov/asked-and-answered.html.

The consumer website, www.MakingHomeAffordable.gov, provides homeowners with detailed information about refinancing and mortgage modification programs. On the site, homeowners will find self-assessment tools and calculators to empower themselves with the resources they need to determine whether they might be eligible for a modification or a refinance under the Administration's program. Through this website, borrowers can also connect with free counseling resources to help with outstanding questions; locate homeowner events in their communities; find a handy checklist of key documents and materials to have ready when making that important call to their servicer as well as FAQs from borrowers in similar circumstances, and much more.

Below are the two primary categories addressed on the consumer website:
Refinancing - Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home.
Modification - Many homeowners are struggling to make their monthly mortgage payments perhaps because their interest rate has increased or they have less income.
Please use the self-assessment tools provided on MakingHomeAffordable.gov to see if you are among the 7 to 9 million homeowners who may be able to benefit from Making Home Affordable. 

Whether you would like more information about this particular program or current information on properties available within the Greenville, NC or Pitt County area, please contact The Pistol Tingen Team at (252) 321-6161.

30-Year Mortgage Rates Below 5% for Fifth Straight Week

by Pistol Tingen

Homebuyers, homeowners and investors are witnessing the fifth straight week where 30-year mortgage rates average below 5%.  Rates dipped this week after rising a week earlier and remain just above record lows.

Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages fell to 4.82% this week from an average of 4.87% last week.  Rates have been below 5% for five consecutive weeks.

The all-time low of 4.78% was recorded on the week of April 2. Freddie Mac’s survey dates back to 1971.

Low rates have created a surge in refinancing activity, with nearly 80% of new home applications coming from borrowers seeking to refinance.  Freddie Mac’s sibling company, Fannie Mae, refinanced $77 billion in loans last month--nearly double February’s level and the best month for such activity since 2003, when the housing market was still surging.

According to Frank Nothaft, Freddie Mac’s chief economist, “The housing industry is starting to exhibit some positive signs.” But Nothaft noted in a statement that the signs were “scarce and too early to tell how permanent.”

Homebuilders are feeling a lot more optimistic that the worst housing downturn in decades may be finally starting to turn around. An index of builders’ confidence released Wednesday posted its biggest one-month jump in five years in April as many homebuyers seized on lower prices and incentives, and took advantage of lower interest rates and tax credits.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country.  Rates often fluctuate significantly, even within a given day.

For the most up-to-date mortgage and real estate information for the Greenville, NC and Pitt County area, please contact The Pistol Tingen Team at (252) 321-6161.

  2008                                                           2009
 
Single Family Homes
320 Closed                                          189 Closed (-40.9%)
$183,115 Average Sales Price          $168,285 Average Sales Price 
 
Townhomes                                              
102 Closed                                            52 Closed (-49%)  
$90,646 Average Sales Price            $97,044 Average Sales Price
 
Condominiums                                         
20 Closed                                              11 Closed (-45%)  
$97,356 Average Sales Price            $86,609 Average Sales Price

If you would like to know more information about the Pitt County-Greenville, NC real estate market, please contact The Pistol Tingen Team at (252) 321-6161.

Greenville, NC Ranked #2 City by Forbes Magazine

by Pistol Tingen

In a special report released on March 25 by Forbes Magazine, Greenville, NC ranked second in the category of the nation’s Best Small Metropolitan Area for Business and Careers.  Greenville is the 10th largest city in North Carolina. In 2008 Greenville ranked eighth in the same category by Forbes Magazine. 

Growth and stability continue for the developing city of Pitt County.  Research from East Carolina’s School of Business indicates that the local work force grew by more than 14 percent over the past five years—that’s more than double the growth experienced by the state as a whole.  Employment is essentially spread across these three sectors:  education, healthcare and manufacturing.

Education is the economy’s main engine. With an operating budget of close to $600 million, East Carolina University employs a diverse group of over 5,000 people, while Pitt Community College has more than 800 faculty and staff members.  The 6,000 people who work at University Health Systems of Eastern Carolina include over 400 physicians.  The approximately 100 manufacturing companies in the county employ 9,000 people.

In the larger metropolitan category, Forbes Magazine ranked Raleigh, NC as the nation’s top city for the third straight year -- awarded for its strong job growth, low business costs and highly educated workforce.

If you are interested in learning more about the Greenville, NC - Pitt County area—and especially relocation and real estate information, please contact The Pistol Tingen Team at (252) 321-6161.

The following is a statement made on March 18 by the National Association of Realtors® President Charles McMillan:

"The National Association of Realtors® applauds the Federal Reserve announcement today that it would purchase an additional $750 billion in Fannie Mae and Freddie Mac mortgage-backed securities and up to $300 billion in longer term Treasury securities.  This is great news for American home buyers and homeowners because mortgage interest rates will continue to remain at historic lows."

In addition McMillan said, "NAR has been advocating since last fall that the Fed be more active in buying mortgage-backed securities.  We are excited that the Fed acted on this provision of the stimulus plan that we offered to the government in November".

Further McMillan said, "Greater numbers of home buyers will be able to purchase a home, and homeowners facing challenges will be able to refinance into better terms.  We already are experiencing a great improvement in housing affordability due to historically low interest rates, and the Fed's move will push affordability conditions to the best level in 40 years.  In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more Americans buy homes and draw down inventory."

The National Association of Realtors®, "The Voice for Real Estate, "is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

For current real estate information in the Greenville, NC and Pitt County area, please contact The Pistol Tingen Team at (252) 321-6161.

 

Displaying blog entries 41-50 of 85

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