Chad McDowell

First time home buyers in Tennessee qualify for a Tax Credit of up to $7500 if they purchase their first home between April 9th, 2008 through June 1st, 2009!

This is a wonderful program that first time buyers need to be aware of and take advantage of. This is NOT a deduction against your taxes, it is a tax credit. There is a difference. If you file your taxes next year and you would have normally owed $1000...now you would RECIEVE $6500. If you owed nothing, you would recieve the entire benefit.

Repayment of the benefit comes two ways and it is INTEREST FREE! First, you will pay an additional $500 per year with your tax filings(again, if you would have owed $1000...now you would owe $1500. If you were going to get a tax return of $1000, now you would only get $500). That continues for 15yrs OR until you sell the home. If you sell for a big enough profit, the remaining balance comes due...if you do not sell for a big enough profit, the note is forgiven.

I urge all first time home buyers in Tennessee to consult with their tax preparer and get details on this credit and take advantage of this opportunity if it makes sense for you!

For additional information, here is a link to FAQ's about this tax credit. http://www.federalhousingtaxcredit.com/faq.php#12

What an incredible program! If you are a homeowner over 63 years old in Tennessee you can suppliment your retirement income with a Reverse Mortgage.

What is a Reverse Mortgage?

A Reverse Mortgage is exactly what its name implies. It is a mortgage that pays you, instead of you paying the bank. And you can receive your benefit in one of three ways: monthly installments paid directly too you, a lump sum payment for you to use as you see fit, or by not taking any money at all but having no more payments on your current mortgage.

Who qualifies for a Reverse Mortgage?

Homeowners over 63 years of age. There are no credit requirements, you can have good credit or bad, it does not matter. Even REALLY bad does not matter, this is not a credit driven benefit. There are no income or asset requirements (other than owning a home), because there is no monthly payment made to the bank, you do not need a qualifying income. However, there are equity requirements, so speak to a mortgage broker to see what the equity requirements are for your area.

Will the bank take my house?

No! Just like a standard "forward" mortgage, you are on the title along with the bank as a lien holder. Your Reverse Mortgage will remain exactly as it is until the time that you no longer live in the home. The only obligations you have in order to keep your Reverse Mortgage from coming due are: you must maintain your property as your primary residence, you must stay current on your property taxes AND home owners insurance, and the property must remain in livable condition and be reasonably maintained.

At the point that you no longer live in the home, the bank STILL does not take the property. The heirs of your estate have first right to either refinance the home or sell it to pay off the debt. Should the heirs NOT take any action, then, and only then, will the bank take possession. And when the bank sells the home to clear the debt owed to them, if it is sold for a profit, that profit goes to your heirs.

Sounds too good to be true, what's in it for the bank?!?

We've all heard the saying "if it sounds too good to be true, it probably is". So let's be honest, we all know banks are not in the habit of handing out money for free. So where do they get a return on their investment? Its simple, like any other "forward" mortgage, the bank charges an interest rate. That means that when you are no longer living in the home and it comes time to clear the debt with the bank, the balance owed will be higher then the original loan, and the bank will have its profit. However, that balance can NEVER exceed the value of the home. You heirs will never be "upside down" on the home. Even if that means the bank gets shorted, that is the risk that the bank assumes when writing the original loan.

For more details about Reverse Mortgages, visit www.aarp.org for answers to other frequently asked questions.

Ok, we are mostly all aware that a HUGE factor in a good vs. bad economy is FEAR! For over a year now, every time I have turned on a national news program I have been inundated with "the end of the world is coming" news reports. Funny how it seems to be a self fulfilling prophesy. I'm not naive, times are harder now...but here is some truth...

This is NOT 1929, and we are NOT headed toward the Great Depression. Period. In 1929-1930, over 1300 banks closed. So far this year...15 banks closed. Unemployment was at 25%, compared to 6% today. In 1933 over 44% of all mortgages were in default, we arent even touching that number right now, not even close. And in 1929-1932 the Dow fell 90% compared to 35% today.

Again, I dont want to act like everything is roses and rainbows but I think its important to keep it in perspective. It can be frustrating when every major news network panders to their own agenda, it makes it hard to get a straight answer. But numbers dont lie, things are tough, but we have been through much, much worse.

So, keep your head up. We cant control everything, but we can control our fear!!