Archive for March, 2010
What You Need To Know About The New California State Tax Credit
March 31st, 2010 Categories: Homebuyer Tax Credit, Mortgage News
Last year, the State of California earmarked $100mil for a tax credit available to purchasers of newly constructed homes. This money was used up in just over 3 months. Fortunately, the State passed bill AB 183 last week with another $100mil for this purpose as well as an additional $100mil for 1st Time Home Buyers. The CA Franchise Tax Board will have the official posting on their website by tonight. Here are the some of the details:
Newly Constructed Homes $100mil pool of money:
- Property cannot have been previously occupied
- Qualified purchases from 5/1/2010 to 12/31/2010
- Property must be considered primary residence and must be occupied for at least the first two years or money is due back to the State
- Tax credit is up to 5% of the sales price or $10,000 whichever is less
- First come first served basis, tax credit is not guaranteed
- Tax credit is allocated over three years and is “use it or lose it”
First Time Home Buyer $100mil pool of money:
- No homeownership within the past three years
- Qualified purchases from 5/1/2010 to 7/31/2010
- Property must be considered primary residence and must be occupied for at least the first two years or money is due back to the State
- Tax credit is up to 5% of the sales price or $10,000 whichever is less
- First come first served basis, tax credit is not guaranteed
- Tax credit is allocated over three years and is “use it or lose it”
If a buyer is both a 1st timer and purchasing new construction, then that money will come out of the Newly Constructed Homes pool of money. Please remember that this tax credit is non-refundable meaning that it is only used to offset taxes owed. Qualified buyers will never receive more money back that what they paid in, unlike the Federal 1st Time Buyer credit.
For example, let’s say a buyer had $3,000 withheld for state taxes, but only owed $1,000 based on their income after deductions. Normally, they would receive a refund of $2,000. The state tax credit would offset the $1,000 owed, therefore giving the buyer a refund of the full $3,000 that was withheld.
This works differently than the Federal 1st Time Buyer credit which would allow the buyer to not only receive the $2,000 refund, but also an additional $8,000 (or whatever portion of the tax credit for which they qualify). As always, please consult a tax professional for more specifics.
Remember, last year’s money went very quickly so it is anticipated that this year’s allotment will go just as fast. Also, keep in mind that buyers must register for this credit, details will be available on the Franchise Tax Board site by tonight.
See The Franchise Tax Board’s Update: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
For More Information Please Contact:
Kevin Kueneke
Sr. Loan Consultant, Direct Lender
Primary Residential Mortgage, Inc.
1000 Aviara Parkway, Suite 110 | Carlsbad | CA | 92011
Phone 760-500-1919 | Fax 619-419-2324
www.primaryresidentialmortgage.com | kkueneke@primeres.com
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Financing: So What Is The Minimum Downpayment?
March 19th, 2010 Categories: FHA, Mortgage News, Real Estate News, VA Loans
There are three types of financing: FHA, VA, and Conventional. Conventional has three subsets: Conforming, High Balance Conforming, and Jumbo. A question I have been asked frequently these days is, “So what is the minimum down payment?” 
FHA:
For purchase prices up to $722,750 in San Diego County, the minimum down payment is only 3.5%, all of which can come from a gift. There is upfront mortgage insurance charged by the FHA of 1.75% of the base loan amount (going to 2.25% effective 4/5/2010) and a monthly mortgage insurance premium. If a buyer puts 5% or more down, the monthly mortgage insurance premium factor is lower.
VA:
For purchase prices up to $437,500 in San Diego County, the minimum down payment is Zero. Larger VA loans are available, but there will be a required down payment all of which can be a gift. I have attached a chart showing the VA down payment amounts for several purchase prices. VA loans do not have mortgage insurance, however, VA does charge a Funding Fee of 2.15% for 1st time use and 3.30% for subsequent usage. Veterans with a service-related disability are exempt from the VA Funding Fee.
Conventional:
· Conforming loans up to $417,000. The minimum down payment is 5% for conventional conforming loans with Private Mortgage Insurance (PMI) approval. PMI company guidelines are strict, so the larger the down payment the better. If there is mortgage insurance, it can have a payment factor as high as 0.96% of the loan amount. This would equate to a monthly amount of $160 on a $200,000 loan and $320 on a $400,000 loan. There is no more mortgage insurance if the down payment is at least 20%.
· High Balance Conforming loans – $417,001 to $697,500 in San Diego County. Typically, the minimum down payment is 15%, but buyers are encouraged to put at least 20% down.
· Jumbo > $697,500 in San Diego County. Some lenders require a minimum 25% down payment, however, Primary Residential Mortgage will accept a 20% down payment for loan amounts up to $2mil (sales price of $2.5mil).
As long as your buyer has a minimum credit score of 620, they are typically eligible for FHA/VA financing. However, Conventional financing is limited for those with lower credit scores. In fact, most lenders will not allow a down payment of less than 20% if the credit scores are less than 720.
For More Information, just send us a note!
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February Foreclosure Report
March 15th, 2010 Categories: Foreclosures & Short Sales, Real Estate News
Despite Foreclosure Inventories, Forclosure Sales Drop
Discovery Bay, CA, March 15, 2010 - ForeclosureRadar, the only website that tracks every California foreclosure and provides daily auction updates, issued its monthly California Foreclosure Report for February 2010.
After reaching the lowest level in a year last month, Notice of Defaults, the start of the foreclosure process, increased by 19.7 percent in February. The number of properties scheduled for foreclosure sale remained near record levels, yet foreclosure sales, either Back to Bank or Sold to 3rd Parties, dropped by 11.9 percent total.
“The disconnect between delinquencies, and foreclosure sales continues to widen,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “While efforts to slow foreclosures are clearly working, it remains unclear that anything has yet addressed the core problem of excess household mortgage debt.”
You can read the full report on us! Read the rest of the story and get a free copy of the full February Foreclosure Report, just fill out the short form below and we’ll email it right out to you!
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