Senate expands homebuyer tax credit, extends jobless benefits
By Stephen Ohlemacher, Associated Press Writer
WASHINGTON - Buying a home is about to get cheaper for a whole new crop of homebuyers - $6,500 cheaper.
First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package. But with that program scheduled to expire at the end of November, the Senate voted 98-0 Wednesday to extend and expand the tax credit to include buyers who already own homes. The House is expected to vote on the bill Thursday.
Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers - or anyone who hasn't owned a home in the last three years - would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.
The bill would also provide every American running out of unemployment insurance benefits this year with an additional 14 weeks of payments. Those in states with unemployment rates at 8.5% or greater would get six weeks on top of that. And it would allow companies losing money to reclaim taxes paid in the past five years.
"This is probably the last extension" of the real estate tax credit, said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the extension.
The homebuyer tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in the bill extending unemployment benefits. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.
"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."
The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.
Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate without a dissenting vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.
"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.
Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.
The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.
The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break - for companies with revenues of $15 million or less - in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.
The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.
"It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns," said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.
The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.
The bill is H.R. 3548.
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Finacial Market Update of the week!!!!
The 30 year fixed rate inched slightly higher today. The 30 year fixed is now at 4.875% for loans from $200,000 to $417,000 with a 740 credit score and a minimum down payment of 10%. See the attached Mortgage Plans and Rates for more details.
Commentary:
The Dow closed above 10,000 points on Wednesday, stronger than expected news from the labor sector, a report confirming inflation pressure remains benign and only a slight uptick in the core consumer price index have combined to put upward pressure on interest rates today. This is all good news. In a separate report the Labor Department announced first time claims for jobless benefits fell by 10,000 during the week ended October 10th. This data tells a story of dwindling layoffs, but details in the report also shows the pace of hiring is nothing more than a trickle. The number of those claiming extended benefits or enrolling in the Emergency Unemployment Compensation programs continues to grow. Until hiring of those that are unemployed improves, our economy will continue to struggle.
All for now.
(The above info was provided by: Ralph Leach, Loan Officer, Ameristar Mortgage Corporation,Cell 414-202-8093)
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Call a Response Realtor Today!!!
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Sincerely,
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Sincerely,
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Good Afternoon:
The 30 year fixed rate dropped below 5% today. The 30 year fixed is now at 4.875% for loans from $200,000 to $417,000 with a 740 credit score and a minimum down payment of 10%. See the attached Mortgage Plans and Rates for more details.
Commentary:
News from the Labor Department earlier this morning showed labor market deterioration is easing - but only gradually. For the week ended September 5th, first-time claims for jobless benefits fell by 26,000 to 550,000. First time claims are expected to continue to decline at a snails-pace through the balance of this year and into 2010. Most analysts will not likely sign off on the idea that the most massive consolidation in the labor secure since the Great Depression is over until the weekly first-time jobless claims number levels off in the neighborhood of 350,000 on a weekly basis. We still have a ways to go before the economy recovers.
All for now
Have a great weeken
The above info was provided by Ralph Leach, Mortgage Loan Officer
Ameristar Mortgage Corporation
Cell 414-202-8093
So, with mortgages rates low and great deals on home prices, now is the time to call a RESPONSE REALTOR!!!!
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Call a Response Realtor Today!!!
Responsive! Respected! Results!
www.naymz.com www.activerain.com/cavaianiteam www.localism.com/cavaianiteam www.twitter.com/cavaianiteam www.linkedin.com/cavaianiteam www.facebook.com www.responserealtors.com gregc@responserealtors.com 262-594-3200
Sincerely,
Greg Cavaiani
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Our team has over 50 years of experience that we put to use to best service our clients. We rely on our honesty, responsibility and sense of community. With us the golden rule does apply.
The Cavaiani Team Story
The Cavaiani Team started in 1993 when Jay Cavaiani, fresh out of college, started a successful real estate career. From 1993 to 2004 the Cavaiani team sold over $100 million in real estate and was one of the most prominent teams in SE Wisconsin. During that time, the team specialized in the Kettle Moraine area and became known as the Kettle Moraine Specialists. Their prominence in the Kettle Moraine grew by becoming the #1 team in the area. As more team members joined and their marketing territory grew, so did their expertise to include, luxury estates, city homes, condominiums, multi-family dwellings, commercial entities and vacant land. From 1993 to 2005 all adult Cavaiani family members became licensed realtors. It truly has been a special family business! When Jay was called into full-time ministry, Greg, assumed the leadership role of the real estate team. In December of 2008, even though the economy was facing some difficult issues in a number of sectors, the Cavaiani team showed their commitment to the real estate sales industry by opening its own real estate company, RESPONSE REALTORS. We had a desire to provide greater individualized care to our clients, more creative commissions and marketing plans, and the passion to combine our wealth of experience and entrepreneurial spirit together for an effective winning combination. With a combined 50 years of experience and our sincere enthusiastic team approach to real estate sales, we look forward to the opportunity of responding to your real estate needs. So... why the name RESPONSE REALTORS? The hallmark of the Cavaiani team has always been and will continue to be extremely responsive to all of our clients. Combined with our successful history of proven response, we know how to market and sell your property. You may have noticed the cross in Realtors. That is our way of proclaiming our desire to continue to run our business with the family and Christian values on which it was founded. We hope you will seriously consider RESPONSE REALTORS if and when you are considering selling or purchasing any real estate. Contact Information: Office 262.594.3200 Fax 262.594.3210
RESPONSIVE, RESPECTED, RESULTS! These are words that we literally stand by! RESPONSE REALTORS has one goal in mind.....helping you achieve your goals! Our team of agents is dedicated to listening to your desires so we can help you create a road map for success. We offer unprecedented service through community expertise, aggressive marketing, flexible fees and exemplary follow up. To receive a combination of integrity, family values, and unparalleled service, call a RESPONSE REALTOR today!
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The Cavaiani Team and Response Realtors
"I've known Greg for awhile now and I can say his sense of community and his puritan work ethic is uncompromising. As I am a RE/MAX broker myself and I can say that Greg, being my competition, is the first person I would suggest in a heart beat to work with."
Sincerely,
Tom Braatz, Re/Max Realty Center
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