Moorestown, NJ

First Time Homebuyer Tax Credit Extended Into 2010! Plus...A New Tax Credit for Certain Existing Home Owners! It's official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009. In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time. So Who Gets What? The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn. Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Deadlines In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Higher Income Caps in Effect The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible. Maximum Purchase Price Qualifying buyers may purchase a property with a maximum sales price of $800,000. First-Time Homebuyer Tax Credit - Frequently Asked Questions Here are answers to some commonly asked questions about the tax credit. What is a tax credit? A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual's primary residence. What is the tax credit for first-time homebuyers (FTHBs)? An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000. Who is eligible for the FTHB tax credit? Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible. As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500. How do I claim the credit? For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf). Can you claim the tax credit in advance of purchasing a property? No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place. Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property? Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property. Are there other restrictions to taking the credit? Yes. According to the IRS, if any of the following describe your situation, a credit would not be due. You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild. You do not use the home as your principal residence. You sell your home before the end of the year. You are a nonresident alien. You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.) Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.) You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009. Can you buy a home from a step-relative and be eligible for the credit? Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed. Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit? Yes. Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years? No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA. If you have any questions that fall outside the situations here, give me a call and if you do not have an accountant to speak with, I can refer you to one.

Karl Peidl

Loan Officer

Pleasant Valley Home Mortgage Corp.

305 Harper Drive

Suite 3

Moorestown, NJ 08057

856-252-1200 x1224

856-252-1240 (fax)

877-296-5454 (toll free)

www.pleasantvalleyhomemortgage.com

Are You In for a Trick or Treat?
Learn What Remains for Those Seeking a Home or Loan

The last weekend in October you were likely treated to a host of Halloween characters, all in search of treats, not tricks. People searching for a new home or a mortgage, whether they donned a costume or not, may have gotten a little of both.

Home loan seekers have been treated to great rates all year long since the Federal Reserve announced it would be purchasing mortgage backed securities, with rates diving below 6.00% since last December. However, if you are looking to buy a home, according to the Case-Shiller index, home prices increased for the fourth straight month, possibly signaling the end to home price declines. So, the question now is what lies ahead?

How About a Little Perspective?
Applications for home loans fell the last few weeks of October as average reported rates for a 30 year fixed rate climbed above 5.00% according to both the Mortgage Bankers Association of America and Freddie Mac. The reason most cited for the decline in applications was increasing rates. Which means that for many people a rate above 5.00% was the cause for a decline in applications.

Perhaps this could be for one of two reasons. The first could be that anyone who could refinance into a sub-5.00% rate had already done so. The second is that people could be thinking that either rates will fall below 5.00% again or that rates in the low 5.00% range are simply not that attractive.

If we were to take a look at home loan rates dating back to 1980, a span of nearly 30 years, the average monthly reported rate for a 30 Year Fixed Rate loan according to Freddie Mac was 9.07%. While the thought of a rate in the 9.0% range seems exorbitant today, today's rates were inconceivable prior to 2001...and especially in October 1981 when rates were a whopping 18.45%!

The chart below shows the average reported monthly interest rates since January 1980. This graph does not take into account the amounts paid to obtain these rates, which were as high as 2.6% in 1984, compared to 0.7% in 2009. The red line represents 7.00%, showing that rates below 7.00% were an abnormality prior to 2002.

The low rates we have seen this decade are largely attributable to the impact of the 9/11 bombing which launched global economies into a tailspin. The result was an aggressive lowering of rates from the Federal Reserve to stabilize the economy. The impact of low interest rates resulted in a rapidly and unsustainable appreciation in property values.

As property values started their return to "normal" we witnessed the plunge into our current recession. We also saw the Federal Reserve get into the mortgage backed securities (MBS) market, becoming the major buyer of MBS this year, driving rates to current and lower levels.

While rates may appear a little less attractive based on where they have been this year, do not let that cloud your judgment. Any home loan rate with a five as the first number followed by a decimal point is a fantastic rate, when all things are considered.

Just as Halloween Has Passed, So Will These Rates
In short, as the Federal Reserve begins to pull back their purchase of MBS, as was started in October, mortgage rates will rise. It is not inconceivable to believe we will see interest rates well above 6.00% at some point in 2010, in particular after March as the Fed is scheduled to wrap up its MBS purchase program on March 31, 2010. Regardless of where we have been, for those wanting a phenomenally low interest rate, acting sooner rather than later is the best decision.

Try These Numbers on for Size
For comparison sake, just to offer a little more perspective, if one were to look at borrowing $150,000 for 30 years, here are some principal and interest payments to consider. A rate of 5.25% would yield a monthly principal and interest payment of $828. The average interest rate of 9.07% since January of 1980 would yield a payment of $1,214 or nearly $400 higher. The highest interest rate of 18.45%, in effect in October 1981, would require a payment of $2,316, a whopping $1,488 a month more. Viewed from a different perspective, one could borrow $417,000 at 5.25% for $13 less a month.

Yes, admit it. We have become spoiled with the best home loan rates we have ever seen. Sure, everyone would love a 30 year fixed rate that starts with the number four. However, do not let rates off their lows deter you from making a decision that could save you thousands of dollars over the time you may have your next loan in effect.

What about Home Prices?
There is no shortage of data one can choose from to base an argument for whether or not home prices have bottomed. One thing is clear though; national data is only relevant for determining overall trends, not local realities. That said, the S&P Case-Shiller index is widely touted as an accurate assessment on both national and local levels for the areas they report on.

Indexed to 100 in January 2000, it is easy to see when home prices began their rise and how they became out of sorts with where they should have been. It's also easy to determine when home prices started their decline in mid-2006.

The chart below, showing a 20 city composite of home prices, also demonstrates what many like to point to in order to demonstrate that home prices have bottomed and are on their way to stabilization and appreciation. The last four months have each marked an increase in month over previous month comparisons; although still lower than the 12 month previous number that is often used for comparison.

The red line indicates the point that many are referencing as the bottom of home prices. Whether you are a buyer looking to take advantage of prices not seen since 2003 or a homeowner looking to refinance, this point of reference could be the trigger you need to make a decision to move forward. No one wants to pay more for a home than they could have and increasing values hopefully will make it possible for more people to rid themselves of higher priced loans.

Whether housing has made a bottom or not, first time home buyers (FTHB) have voted with their wallet, showing that home prices overall are now affordable and they have been buying en masse. Washington and the IRS, FTHBs have accounted for monthly sales volume as high as 50% or more of total sales this year.

What Now?
Whether you are looking to refinance or purchase a home, the best way to determine what you may be eligible for is to speak with a professional. They can assess your situation and help you make a decision that is in your best interest.

However, in order to make the best decision and take advantage of rates that historically will be viewed as the lowest we may see in our lifetime, sooner is better than later to pick up the phone. Regardless of what happens to home prices, we do know that interest rates are on the rise. The Federal Reserve will end their program for purchasing MBS next March putting pressure on home loan rates to rise.

Go on, pick up the phone, call your mortgage professional and say "Trick or Treat!" Sure, you might be a little late according to the holiday calendar but you just might find something to be thankful for.

Karl Peidl

Loan Officer

Pleasant Valley Home Mortgage Corp.

305 Harper Drive

Suite 3

Moorestown, NJ 08057

856-252-1200 x1224

856-252-1240 (fax)

877-296-5454 (toll free)

www.pleasantvalleyhomemortgage.com

Moorestown NJ July 2009 Homes Sales

# of Homes For Sale = 205

# of Homes Sold = 15

# of Months Supply = 13.7

Type of Market = Buyers

address	subdivision	bedrooms	bathrooms	sold_price	days on market	seller concessions
61 Foxwood Dr, Moorestown, NJ	Blason Woods	3	2.2	$547,500	97
115 Oakmont Dr, Moorestown, NJ	Laurel Creek	4	3.5	$838,000	36
610 N Lenola Rd, Moorestown, NJ	Lenola	2	1	$143,000	329	$4,850
710 Worthington Dr, Moorestown, NJ	Meadowbrook	4	2.5	$655,000	49
8 S Close, Moorestown, NJ	Moorestown Mews	3	2.5	$310,000	181
599 Devon Rd, Moorestown, NJ	None Available	4	2.5	$380,000	22
2 W Spruce Ave, Moorestown, NJ	None Available	4	2	$480,000	32
200 Laurence Dr, Moorestown, NJ	None Available	3	2.5	$505,000	115	$5,050
1444 Georgian Dr, Moorestown, NJ	North Riding	3	2.5	$455,000	131
2 Walnut Ct, Moorestown, NJ	Northwest Estates	5	2.5	$725,000	65
735 Lippincott Ave, Moorestown, NJ	Northwest Estates	4	4.5	$999,000	7
609 E 2nd St, Moorestown, NJ	Second Street Walk	4	2.5	$612,000	370
309 W Main St, Moorestown, NJ	Town Center	5	2	$469,500	31
220 E Central Ave, Moorestown, NJ	Town Center	5	2.2	$899,900	29
6 Castleton Ln, Moorestown, NJ	Wexford Estates	4	3.5	$710,000	116

Have a great day

Make This YOUR Best Year Ever

Leander McClain, Burlington /Camden County, NJ Realtor & Real Estate Consultant, Keller Williams Realty, 1814 Route 70 E Cherry Hill, NJ 08003 856-685-1677 Direct

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GOODBYE CIRCUIT CITY

 

As you may have heard, Circuit City is going out of business.  My clients in Burlington County, New Jersey have asked me  many questions about this closure (I guess I am the local circuit city expert??).  Anyway, here is some information that I found that may answer some of the most common questions regarding the closure.

Have a great day and 

Make This Your Best Year Ever

 

Leander McClain, Burlington Township Realtor & Real Estate Consultant, EXIT Buyers Plus Realty, 15 E. Broad Street, Burlington, NJ 08016 609-505-6578(cell)  

 

 

Will Circuit City stores continue to accept Circuit City GIFT CARDS?

• Yes, customers holding Circuit City gift cards may redeem them at full

value at our stores during the liquidation sales. Once the stores are

closed and the company is out of business, the gift cards will have no

value.

Are Circuit City’s EXTENDED WARRANTIES affected by the liquidation?

• No. Circuit City Advantage Protection Plans® (extended warranties) have

been backed by third-party independent companies for more than 15

years and as a result, are not impacted by Circuit City’s closing.

• Currently, all Circuit City Advantage Protection Plans are fully backed by

the Assurant Solutions companies. Assurant Solutions operates as

Federal Warranty Service Corporation, Sureway, Inc., and United Service

Protection, Inc. Assurant Solutions is part of Assurant, Inc. (NYSE: AIZ),

and its extended service contacts are backed by an Assurant insurance

subsidiary rated A “Excellent” by A.M. Best Co.

• Because they are backed by third-party company Circuit City Advantage

Protection Plans WILL be available on products purchased during Circuit

City’s liquidation sales.

What number do I call about my Circuit City Advantage Protection Plans®

(extended warranty)?

• If you have questions about your TV (in-home) or appliance coverage, call

1-800-878-1167.

• If you have questions about your coverage for computers, computerrelated

products, small/portable electronics, and carry-in products, call 1-

800-555-4615.

• If you have questions about coverage purchased in Puerto Rico, call 1-

877-311-0611.

Who do I call if I have questions about the status of Circuit City Rebates?

• You can check the status of your Circuit City Rebate at the following Web

site: https://www.ccityrebates.com/promocenter/circuitcity/index.jsp

• Please note that manufacturers' rebates are the responsibility of the

various manufacturers.

What payment types will be accepted at the liquidation stores?

• Stores in liquidation will accept cash, Circuit City gift cards, Circuit City

Rewards Certificates, and most credit cards. Personal checks will not be

accepted. All sales are final.

How much will merchandise be marked down, and can customers negotiate

prices for the merchandise?

• There will be clearance pricing, but specific discounts are not being

announced. All sale prices are at the discretion of the liquidator. Prices

are non-negotiable and all adjustments must be approved by the

liquidator’s on-site managers.

 

Do customers who hold Circuit City-branded credit cards need to pay off

their balances immediately? Can they just stop making payments now that

Circuit City is in liquidation?

• Customers should continue to follow the current payment terms /APR that

they’re currently operating under. Circuit City’s credit card program is

administered by Chase and customers will continue their credit

relationship and repayment of their obligations with Chase.

Will Chase close-out or transfer accounts for Circuit City-branded credit

cards?

• This is a Chase decision since they own the credit card relationship with

the customer and Chase is not going out of business. If there are

modifications to the card type, then Chase would notify the card holder.

Customers with a Circuit City Rewards Visa can still use their card at any

company that honors VISA.

• No new Circuit City-branded credit cards will be issued and no new reward

points will accrue from a Circuit City purchase.

Will Circuit City stores in liquidation stores accept Circuit City-branded

credit cards for purchases? If not, why not?

• No, Circuit City-branded cards will not be accepted in the liquidation stores

because we are not offering promotional financing or rewards in the

liquidation stores and we want to avoid any customer confusion.

Can I use my Circuit City Rewards Certificates?

• Circuit City Rewards Certificates will be accepted during the liquidation

sales. Just bring your Circuit City Rewards Certificate to your local store,

and the points will be redeemed for credit toward a purchase.

So, the financing offers spelled out in your national newspaper circulars on

Sunday, January 18, 2009 will not be honored?

• That’s correct. Those ads were printed weeks before the Bankruptcy

Court approved Circuit City’s liquidation on January 16 and were in the

circulation pipeline before the hearing. The liquidation order supersedes

any other business the company had in the works, including advertised

promotions.

• Circuit City will cease marketing and advertising immediately. Any

marketing for the liquidation sales will be the responsibility of the

liquidators.

Will Circuit City’s price matching policy or the One Price PromiseSM apply

during the liquidation sale?

• Because the liquidation company is in charge of the sales at the closing

stores, their policies are in force. So, One Price Promise does not apply

during liquidation events, nor does the company’s Unbeatable Price

Guarantee. All sales are final.

What about returns and refunds?

• Customers can return products they purchased prior to January 16 for a

14-day period for exchange or refunds. All other terms of return policy are

in force.

• When closing sales begin, on or around January 17, 2009, all sales will be

final.

• For products covered under the Manufacturer’s Warranty, customers

should call the manufacturer.

 

Will delivery service be available for products purchased from liquidation

stores?

• No.

Will Circuit City offer home theater installations during the closing sale?

• No.

Will Circuit City offer PC services and repairs at liquidation stores during

the closing sale?

• Services already underway at the liquidation stores will be completed

promptly, but no additional jobs will be accepted at these stores.

Will car electronics installations be available at liquidation stores during

the closing sale?

• Yes, Circuit City will continue to offer car electronics installation during the

closing sale.

What if a customer purchased products at one of the closing stores and the

product needs service?

• For products covered under the Manufacturer’s Warranty, customers

should call the manufacturer.

• For products covered under Circuit City Advantage®, guests can call the

toll-free number that is printed on the bottom of the product receipt.